Westlake Village, California – Low inventories and reduced incentives following the “Cash for Clunkers” program will result in lower sales in the U.S. in September, according to J.D. Power and Associates.

The company said that September new-vehicle retail sales are expected to be 590,000 units, representing a seasonally adjusted annualized rate (SAAR) of 7.5 million units.

“Low inventories and reduced incentives, combined with the effects of CARS (Car Allowance Rebate System) pull-ahead sales, spell tough conditions for September,” said Gary Dilts, senior vice-president of global automotive operations. “September’s retail SAAR is projected to be the lowest selling rate in 2009. However, improving consumer confidence and credit conditions in the months ahead are likely to help rebuild the retail industry.”

Fleet volume remains low, and September fleet sales are expected to decline by nearly 50 per cent when compared with September 2008. As a result, September total light-vehicle sales are projected to come in at 710,000 units, down 29 per cent from September 2008.

The retail segment mix has returned to pre-CARS program levels, with the share of compact cars decreasing to 19 per cent in September, from 28 per cent in August. Premium vehicles and large pickups have also returned to market share levels consistent with the 2009 average prior to the CARS program.

“After the anomaly created by the CARS program, September’s balanced segment mix indicates a return to more natural consumer behaviour,” said Jeff Schuster, executive director of global forecasting. “This stability is fundamental to a market recovery and a return to a healthy industry. However, consumers are hesitant and the automotive industry remains fragile, and the risk of a secondary decline remains.”

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