WESTLAKE VILLAGE, Calif. —J.D. Power and Associates and LMC Automotive release their predications for January sales, with the two firms expecting sales to rise 6 percent year over year to 681,000 units.

Based on their forecast, the two firms said sales will pace at seasonally adjusted annualized rate (SAAR) of 10.9 million units, which is lower than the selling rate in December 2011 but well above January 2011.

"Retail light-vehicle sales in January are showing stability coming off the 2011 high note in December," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "Vehicles are currently remaining on dealer lots for fewer than 50 days on average, which is the lowest level for January for the last several years. This is a good indication that pent-up demand is beginning to return to the market."

Total light-vehicle sales in January are expected to come in at 869,600 units, a 6 percent increase vs. January 2011. Fleet sales are expected to increase by 9 percent compared with January 2011, and are expected to account for 22 percent of total sales.

The traction gained in 2011, which ended on a high note for both retail and total light-vehicle sales, is carrying over into 2012 and building a foundation for strong sales this year, according to J.D. Power and Associates. LMC Automotive is maintaining its forecast of a 13.8 million-unit year for total light-vehicle sales and a 11.3 million-unit year for retail light-vehicle sales.

"The upward movement of auto sales during the second half of 2011 and the stabilization of that trend in January casts a favorable light on 2012 despite the macro-level risks the industry continues to face," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "Coming off the North American International Auto Show in Detroit, a renewed sense of optimism is returning to the industry, as the focus continues to shift from survival to planning for the future."

North American light-vehicle production ended nearly 10 percent higher in 2011 than in 2010, according to LMC Automotive. Volume came in at 13 million units, an increase of 1.2 million units from 2010. The Detroit 3 OEMs outperformed the total industry in 2011, with a 15 percent increase in production from 2010. European OEMs also saw production increases of more than 34 percent, supported by increased localization.

Production by Japanese OEMs was down more than 5 percent from 2010 due to supply chain challenges resulting from the Japanese earthquake/tsunami and Thailand flooding disasters.  Hyundai's North American production increased by 44 percent, as the company also increased its manufacturing operations in North America.

Vehicle inventory declined slightly to a 52-day supply at the beginning of January due to strong December 2011 sales and the holiday production shutdown last month.  Car inventory was at a 55-day supply in January, down from 59 days in December, while truck inventory levels fell to a 50-day supply from 63 days.

"As industry-level inventory has returned to a healthy level, the need for a disciplined balance and management of supply and demand will continue to return as well," Schuster said.

For more information, visit www.jdpower.com.