The seasonally adjusted annualized rate for new-vehicle retail sales for September is likely to reach a more-than-two-year high — not counting August 2009, when sales were lifted by CARS — and it appears that shoppers were putting off purchases at the end of last month, thus leading to a “vigorous start” this month, according to J.D. Power and Associates.

Specifically, J.D. Power predicts that the industry will show new-retail sales of 769,000 units. The resulting SAAR would be 9.7 million vehicles, which officials said is the strongest the industry has seen in over two years when August of last year is taken out of the equation.

“The vigorous start to September is an indication that vehicle buyers delayed some of their purchases in late August, and were most likely waiting for Labor Day sales and hoping for increases in vehicle availability,” stated Jeff Schuster, J.D. Power’s executive director of global forecasting.

When fleet sales are added in, the sales projection for September is 961,500 vehicles, according to J.D. Power. This would be a 29-percent year-over-year lift. Officials emphasized that Cash for Clunkers drawing to a close affected the year-ago period.

The predicted SAAR for total new-vehicle sales is at 11.8 million, up from 9.2 million units in September 2009 and 11.4 million vehicles in August.

Projections for Remainder of 2010

Continuing on, J.D. Power noted that in July and August, it had trimmed its full-year forecast each month because of “mixed indicators.”

But this month, the company’s full-year new-vehicle sales outlook is stable, as J.D. Power is again predicting a total new-vehicle SAAR of 11.6 million, with a retail SAAR of 9.2 million.

“The strength in the first half of September is exactly what the industry has been looking for to begin a more measurable recovery through the remainder of the year with continued progress into 2011,” said Schuster. “The expected increase in vehicle availability should provide relief in the coming months as many 2011 models hit the showrooms, but the industry’s attention will remain on the economic indicators to gauge the level of recovery.”

As far as 2011, J.D. Power is still projecting total new sales to come in at 13.2 million units and retail sales to hit 10.7 million vehicles. That said, officials warn that sales could possibly be lighter in light of how topsy-turvy the economy and consumer demand can be.

Production Numbers

Moving along to discuss production in North America, officials said it is still right-sized based on demand. This followed a production spike in the first six months of 2010.

J.D. Power projects that North America will build 2.8 million units in the fourth quarter. This projected total would be up nearly 3 percent year-over-year.
As for its full-year forecast, J.D. Power is anticipating this will come in at 11.7 million units, marking a 36-percent uptick.

J.D. Power said capacity utilization climbs from 48 percent a year ago to 66 percent for 2010. For full-year 2011, North American production is likely to hit 12.7 million units. The company is predicting 72 percent capacity utilization for next year.

Continuing on, officials also noted that the industry done a good job at controlling inventory in 2010. When September started, the inventory was steady from its August level of 52 days’ supply.

In September 2009, days’ supply was at 29 days. However, this resulted from the inventory dearth stemming from CARS, and typically, inventory levels are at 60 days.

“The recovery in North American production will finish 2010 by well outpacing the sales recovery, but the production increase in 2011 will not be as pronounced, as inventories are expected to be replenished and stable next year,” Schuster noted.

“However, there are still availability shortages with some key models, which may impact demand during the remainder of 2010,” he added.