UPDATE 1-J.D. Power raises 2010 US auto sales forecast

* J.D. Power sees May US auto sales up 17 pct from yr-ago

* Full-year 2010 US forecast at 11.8 mln, from 11.7 mln

* Fleet sales make up for slack May retail sales figure

* May retail sales hampered by weaker buyer incentives

DETROIT, May 20 (BestGrowthStock) – J.D. Power and Associates
raised its forecast for 2010 U.S. light-vehicles sales to 11.8
million from 11.7 million based on stronger fleet sales, it
said on Thursday.

“Positive first-quarter GDP growth and favorable employment
numbers suggest that the economy is performing slightly ahead
of expectations,” J.D. Power said. “In addition, robust product
activity is expected to drive consumers into showrooms, and
fleet volume is being replenished from the low levels of
2009.”

Total U.S. light-vehicle sales for May will be 11.3 million
units on a seasonally adjusted annualized rate (SAAR), up from
9.8 million in May 2009, J.D. Power forecast.

However, less spending on buyer incentives from automakers
will cause May retail sales — those mainly to individual
consumers — to fall to 9.2 million vehicles on a SAAR basis
compared with 9.6 million in April, the analysis and research
group based in Southern California said.

Fleet sales — mainly to government agencies and companies
— will rise to 205,000 new vehicles, up 52 percent from last
May, J.D. Power said.

U.S. light-vehicle production for 2010 was forecast at 11.2
million cars and trucks, an increase of 32 percent from 2009.

Automakers in March boosted incentives to match those
instituted by global industry leader Toyota Motor Corp
(7203.T: ), which was reacting to a sales dip caused by safety
recalls and suspension of sales of some of its top-selling
cars. Toyota has not said whether the level of its incentives
will remain into summer.

“Compared with April, incentives this month are flat at
$2,800 (per vehicle), which is contributing to the slower sales
pace,” said Jeff Schuster, executive director of global
forecasting at J.D. Power.

“However, with the unofficial start to summer approaching,
consumers are more inclined to consider purchasing a new
vehicle, and it’s likely that Memorial Day (weekend) sales
incentives will generate an even stronger close for May,” he
said.

Memorial Day is observed on Monday, May 31.

The J.D. Power sales forecast for the full year is
consistent with an industry consensus for a slow, steady
recovery from the recession. After sales rates of more than 16
million from 1999-2007, U.S. auto sales fell to 13.2 million in
2008 and 10.4 million in 2009.

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(Reporting by Bernie Woodall, editing by Maureen Bavdek)

UPDATE 1-J.D. Power raises 2010 US auto sales forecast