NEW YORK -- Greater credit availability is the biggest single factor why U.S. light-vehicle sales for 2011 should be around 1 million units higher than last year, the top forecaster for J.D. Power and Associates said last week.
Other positive factors for 2011 include the return of leasing and fewer customers with negative equity, said Jeff Schuster at the Auto Industry Hot Topics Conference here hosted by J.D. Power and Standard & Poor's Ratings Services. Both factors are related to higher used-car values, which in turn reflect the double-digit drops in U.S. new-vehicle sales in 2008 and 2009.
The publicly traded dealership groups all report they are having an easier time getting customers financed, although it has taken longer for the market for subprime auto loans to recover.
For 2011 auto sales, negatives include the housing market, fuel prices, higher vehicle prices and lower incentives. Schuster said. He said "exceptional events," like the Japan earthquake last spring, also hurt.
J.D. Power expects U.S. light-vehicle sales of 12.6 million in 2011, up from 11.6 million last year. The good news is that retail demand accounts for the entire increase, Schuster said. J.D. Power expects U.S. retail auto sales, not counting fleet, to grow to 10.2 million, up from 9.2 million in 2010.
The company cut its 2011 light-vehicle forecast last month, from 12.9 million. Schuster said last week he was sticking to the lower forecast for the time being, despite "a little bit of a positive surprise" for September U.S. auto sales.
Automotive News estimates the U.S. seasonally adjusted annual sales rate for September at 13.1 million light vehicles, up from 11.8 million in the year-ago month.
Nevertheless, the risk of a double-dip recession that could hurt auto sales has grown this year, according to Beth Ann Bovino, S&P senior economist. In a separate presentation at the conference, she said S&P now rates the likelihood of another recession at 40 percent, up from 25 percent in March.
She said U.S. economic growth is so slow that it wouldn't take much in the way of one-offs -- like a big natural disaster, another sudden spike in oil prices, a government default, or a combination of those -- to drive the economy back into a recession.