WESTLAKE VILLAGE, Calif. — New-vehicle retail sales rebounded in the first half of June, with the retail selling rate showing improvement from May’s 9.3 million-unit level, according to J.D. Power and Associates.

June new-vehicle retail sales are projected to come in at 884,800 units, representing a seasonally adjusted annualized rate (SAAR) of 9.9 million units. Large pickup and compact car sales are supporting the overall retail sales increase, accounting for 10.6 percent and 17.6 percent of retail sales, respectively. Large pickup sales are at their highest level since February, while compact car sales are up from 17.2 percent in May.

“There has been some easing of negative variables in June, as the inventory shortage has not been as severe as expected, and gas prices have dropped noticeably from higher levels in April and May,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “Provided that the economy decides to cooperate, the automotive summer slowdown will only be a speed bump, and a return of a measurable recovery pace is still expected in the second half of 2011.”

Total light-vehicle sales for June are expected to come in at 1,106,400 units, an 8 percent increase over June 2010. Fleet sales in June are expected to be lower due to the inventory shortages, with a projected finish at 221,600 units, down 9 percent from last year.

Due to the high level of uncertainty, the forecast for 2011 retail sales has slightly reduced to 10.5 million units from 10.6 million units, according to J.D. Power and Associates. The forecast for total sales has been lowered also to 12.9 million units from 13 million units.

“Conditions for light-vehicle sales are improving, but the automotive market remains fluid and susceptible to a slower economic recovery or external shock,” said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. “This risk is driving a more cautious approach to the market outlook for the remainder of 2011 and into 2012.”

Through May, North American light-vehicle production is up 10 percent from the same period in 2010. Volume for the first five months of 2011 reached 5.3 million units, compared with 4.8 million units built during the same period last year. Japanese manufactures saw production decline by nearly 13 percent so far this year due to parts shortages.

The recovery pace has been accelerated, however, and most operations are expected to return to pre-disaster levels in the coming weeks. In addition to the volume recovery with the Japanese brands, production has been ratcheted up among the Detroit Three and European and Korean brands.

The Detroit Three are up 18 percent year to date compared with 2010, the European manufacturers are up 44 percent and the Korean manufacturers are up 56 percent for the same period.

Inventory levels declined to 49 days-supply at the beginning of June, five days less than the May’s 54 days’ supply. The drop was less than expected but is consistent with the decline in the selling pace in May, according to J.D. Power and associates. Inventory conditions are expected to improve in the coming months but many smaller size models and some Japanese imported models will remain in very short supply for the near future.

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