WESTLAKE VILLAGE, Calif. —J.D. Power and Associates says retail sales are beginning to pick up momentum after a sluggish summer, with market research firm reporting that September’s retail sales rate is on track to outpace August.

New-vehicle retail sales are currently projected to reach 842,400 units, which represents a seasonally adjusted annualized rate (SAAR) of 10.3 million units, according to J.D. Power. This marks the first time the retail selling rate would be above 10 million units since April.

"Coming off a solid Labor Day sale, retail sales exhibited unexpected strength in the second week of September, as recovering inventory levels have helped to bring buyers back into the market," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. "However, incentive levels remain flat compared with August and the economy remains a concern, so the sales pace in the second half of the month is expected to give back some of those gains."

Light-vehicle sales are expected to come in at 1. 038 million units for the month, a 9 percent year-over-year increase. Fleet sales are expected to be down 1 percent vs. last year, but will account for 19 percent of total sales.

Considering the strong sales pace in September, J.D. Power is maintaining its forecast for light-vehicle sales in 2011 and 2012, according to the company. Year over year, total light-vehicle sales for 2011 are expected to increase 9 percent to 12.6 million units and retail light-vehicle sales are expected to increase 11 percent to 10.2 million units.

For 2012, the outlook for total light-vehicle sales remains at 14.1 million units and retail light-vehicle sales are at 11.5 million units, according to J.D. Power.

"The uncertain global environment, specifically the debt troubles in Europe, continue to be the major source of downside risk in the U.S. economy and automotive markets," said John Humphrey, senior vice president of automotive operations at J.D. Power and Associates. "Until a level of stability is reached globally and consumer confidence is returned, the U.S. automotive selling pace is not expected to return to pre-recession levels."

Through August 2011, light-vehicle production in North America has increased to 8.5 million units, up 8 percent from the year-ago period, according to J.D. Power. The Detroit 3 have increased production by 16 percent, year to date, while the Japanese manufacturers have lost 8 percent due to parts shortages from the March earthquake in Japan.

European OEMs are up 38 percent for the same period, as a result of added production of the BMW X3 and Volkswagen Passat in North America, as well as strong demand for the new Volkswagen Jetta.

Vehicle inventory maintained a 49-day supply at the beginning of September while car inventory tracked at 40-days, both unchanged from August. Stronger production levels and imported shipments returning are causing the improvements in inventory. Though, several manufacturers continue to have limited supply availability, including Hyundai/Kia, Honda and BMW.

The 2011 North American production outlook remains on track to increase 9 percent to 12.9 million units, according to J.D. Power. Fourth quarter 2011 production output is expected to reach 3.3 million vehicles, an increase of 11 percent from the year-ago period.

"Continued inventory stock replenishment and Japanese OEM recovery is responsible for the large year-over-year increase relative to the lower level of recovery in vehicle demand," Schuster said. "As inventory normalizes into 2012, growth in production levels is expected to slow to a pace more consistent with sales."

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