WESTLAKE VILLAGE, Calif. -

After an October that saw sales soar, bringing the SAAR over 13 million, the industry is expected to keep picking up steam, according to J.D. Power and Associates.

Per the company’s monthly sales forecast, this month’s total light-vehicle sales are expected to come in at 975,600 units, marking an 8-percent climb year-over-year.

That said, fleet sales are expected to decrease by 6 percent, compared with November 2010, but will still account for 19 percent of total sales.

As for November new-vehicle retail sales, they are projected to come in at 791,900 units, which represents a SAAR of 11.3 million units.

This represents the highest monthly selling rate in three-and-a-half years, company officials asserted.

Explaining this further, John Humphrey, senior vice president of global automotive operations at J.D. Power said, "Retail light-vehicle sales in November are outperforming expectations on a month-to-date basis, providing good news as 2011 comes to a close and the focus starts to shift to 2012.

"The improving performance of the past three months suggests that the current momentum, primarily driven by replacement demand and improvements in vehicle availability, is not an aberration,” he continued.

The Big Picture

Taking these numbers into account after a strong October and expectations for an even stronger November, LMC Automotive, formerly J.D. Power Automotive Forecasting, is increasing its forecast for full-year 2011.

It is boosting its projections for  total new-vehicle sales to 12.7 million units (up from 12.6 million units) and increasing its retail projection to 10.3 million units (up from 10.2 million units).

Commenting on this revision, Jeff Schuster, senior vice president of forecasting at LMC Automotive, had this to say: "The upward forecast revision to 2011 represents the first increase to the forecast all year and tempers the cloud of uncertainty that has been over the automotive market for several months.

"The current recovery pace appears sustainable into 2012. As long as there is not an external shock or economic setback, the selling rate could be stable above the 14-million-unit level during the second half of 2012,” he added.

The company is also maintaining its forecast for 2012 at 13.8 million units for total new-vehicle sales and 11.2 million units for retail sales.

To illustrate the expected sales outcome for November, J.D Power offered the below chart:

A Climb in Production

Production volume in North America is apparently also on the rise.

It has increased by 920,000 units, or 9 percent, through the first 10 months of 2011, compared with the same period in 2010, according to LMC Automotive.

The Detroit 3 OEMs are even seeing double-digit gains, rising 14 percent in year-to-date production through October.

And European OEMs are up a significant 38 percent.

That said, Japanese manufacturers, as a group, are feeling the affects of the past spring’s earthquake in Japan, as well as the recent flooding in Thailand.

Japanese manufacturers posted an 8-percent decline year-to-date in October from the same period in 2010.

And the impacts from the floods are not expected to subside any time soon. According to LMC Automotive, the impacts are “expected to continue through the fourth quarter, causing further downtime to their North American operations.”

But Toyota is apparently recovering faster than initially expected, with lost volume estimated to sit at only 5,000 units in the fourth quarter.

Due to the location of Honda’s Thai plants, the OEM is expected to face a fourth-quarter loss in North America of 35,000 units.

As for supply, overall vehicle inventory rose to a 58-day supply at the beginning of November, from 50 days at the beginning of October.

Breaking it down by segment, car inventory improved to a 53-day supply, up from 43 days in October, while truck levels are stable with a 62-day supply.

On the other hand, several manufacturers continue to remain below the industry norm of a 60-day supply.

Hyundai/Kia began November with 28 days’ supply, Honda was at 37 days’ supply and BMW at 28 days’ supply, company officials shared.

Overall, despite some setbacks, LMC automotive contends, “2011 North American production outlook remains on track for 12.9 million units, an increase of nearly 9 percent from 2010.”

But production rates still sit far below the 2001–2006 period levels.

“While overall production volume in 2011 is the highest since 2007’s 15-million-unit level, it remains well below the mid-15 million level during the 2001–2006 time period,” officials concluded.