) -- May auto sales are off to a dismal start.
Auto retail sales in May are being hit by several negative variables -- specifically, high gas prices, lower incentive levels and some inventory shortages," said Jeff Schuster, global forecaster at J.D. Power and Associates, in a prepared statement. "As a result, the industry will likely be dealing with a lower sales pace at least through the summer selling season, putting pressure on the 2011 outlook."
J.D. Power projects May retail sales of 858,400 units. The retail seasonally adjusted annualized rate of 9.6 million units is about a million units higher than a year ago, but down sharply from the year-to-date SAAR of 10.7 million units. "Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles," J.D. Power said.
The firm has reduced its forecast for 2011 retail sales to 10.6 million from 10.7 million, but left its forecast for total sales at 13 million, reflecting a continuing recovery. The firm also projects May light vehicle sales of 1.1 million units, about 6% higher than the same month a year earlier.
In terms of inventory levels, J.D. Power said several small cars and many models imported from Japan remain in "very short supply." Parts shortages for Japanese manufacturers, particularly
, will likely result in the loss of 400,000 units over the short term. However, much of the lost volume is expected to be recouped in the second half of 2011.
Other brands including
should benefit from the problems at Japan's big two, Schuster said, in an interview.
"Given the mounting inventory pressure with the Japanese brands, specifically Toyota and Honda, we expect to see further share erosion in May and likely though the early summer," he said. "Lack of some vehicle availability creates an opportunity for the domestic brands -- GM, Ford and
-- as well as other non-Japanese OEMs, such as
-- Written by Ted Reed in Charlotte, N.C.
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