Auto Sales in October Likely Up 10%

DETROIT TheStreet) -- Strong U.S. auto sales trends continued in October, according to experts.

New light-vehicle sales in the U.S. are expected to total about 1 million units, up about 10% from the same month a year earlier, according to both J.D. Power and TrueCar.Com.

"Consumers are no longer dragging their feet on new vehicle purchases as they feel the economy is moving in the right direction," said TrueCar analyst Jesse Toprak. He said the seasonally adjusted annualized rate of sales would rise for the fifth straight month and will reach its highest level in more than two years.

TrueCar estimated an October SAAR of 13.4 million new vehicles, up from 13.1 million in September 2011 and up from 12.2 million in October 2010. J.D. Power put the SAAR at 13.1 million.

J.D. Power maintained its 2011 forecast at 12.6 million units for light-vehicle sales, but reduced its 2012 forecast to 13.8 million units from 14.1 million units.

"The risk of a double-dip recession has increased to nearly 40%, driving the reduction in the forecast for 2012," said J.D. Power analyst Jeff Schuster, in a prepared statement. "While there have been recent positive signs in the economy and we expect another recession will not materialize, the recovery pace for 2012 is taking another hit, although a complete halt in growth is unlikely."

During the month, Japanese automakers were able to increase inventories and were offering higher incentives.

"Japanese automakers have seen substantial improvement in inventory this month and buyers are responding to the better availability of product as well as higher incentives," said TrueCar analyst Kristen Andersson.

The average incentive per unit is expected to be $2,669, up 0.6% from September and up 4.6% from October 2010, with double-digit gains in incentives at Honda ( HMC), Nissan and Toyota ( TM) and 2% to 3% increases at Ford ( F) and GM ( GM).

TrueCar estimated a 33% sales gain at Chrysler, a 7% gain at Ford, a 5% gain at GM as well as a 3% decline at Honda and a 7% decline at Toyota. -- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to http://twitter.com/tedreednc.

>To submit a news tip, send an email to: tips@thestreet.com.

More from Stocks

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

UAW Officially Files Complaint on Tesla Thanks to CEO Elon Musk

UAW Officially Files Complaint on Tesla Thanks to CEO Elon Musk

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home