Westlake Village, California – Car sales in the U.S. are weak in May, due to such as factors as high gas prices and low incentives, according to J.D. Power and Associates.

New-vehicle retail sales for May are projected at 858,400 units, representing a seasonally adjusted annualized rate (SAAR) of 9.6 million units. The SAAR is nearly one million units higher than it was in May 2010, but has dropped sharply from the 2011 year-to-date average of 10.7 million units.

“Retail sales in May are being hit by several negative variables, specifically, high gas prices, lower incentive levels and some inventory shortages,” said Jeff Schuster, executive director of global forecasting. “As a result, the industry will likely be dealing with a lower sales pace at least through the summer selling season, putting pressure on the 2011 outlook.”

Total light-vehicle sales in May are expected to come in at 1,073,000 units, which is six per cent higher than in May 2010. Fleet sales are projected at 214,600, down eight per cent from May 2010, primarily due to inventory shortages.

The outlook for light-vehicle sales is beginning to bear the risk of the selling pace slowdown that J.D. Power projected to occur during the next several months. The company has reduced its forecast for retail sales from 10.7 million to 10.6 million units. The forecast for total sales, including fleet, remains at 13 million units.

“Uncertainty is the driver of mounting risk to the forecast for light-vehicle sales in 2011, as gas prices hover at or above $4 per gallon and inventory is at very low levels in the small-car segments,” said John Humphrey, senior vice-president of automotive operations. “However, the pace of the recovery set in the beginning of the year is expected to resume during the second half of 2011.”

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