March auto sales seen up 6 percent: research firms

(Reuters) - New-vehicle sales in March are expected to rise 6 percent from last year due to strong demand in the retail market, according to J.D. Power and Associates and LMC Automotive.

Total sales in March are projected to finish at 1,372,400 cars and light trucks, compared with 1,244,009 vehicles in the same month last year, research firms J.D. Power and LMC said.

That estimate would translate to an annual sales rate in the month of 14.1 million vehicles, compared with 15 million in February and 13 million in March 2011, the research companies said.

"Each month of strong sales brings with it increased optimism that the pace of growth represents a true recovery for the sector," John Humphrey, senior vice president of global automotive operations at J.D. Power, said in a statement.

"Barring any future shock related to geopolitical issues in the Gulf region and further upward pressure on the price of oil, we believe sales will continue on a solid pace for the balance of the year," he added.

U.S. auto sales topped expectations in January and February, although some analysts and industry executives have said the industry will not recover significantly until U.S. home prices pick up and consumers feel more prosperous.

The auto industry is in its third year of a fitful recovery from a severe slump that led to the bankruptcies of General Motors Co and Chrysler in 2009. The U.S. industry averaged sales of nearly 17 million vehicles a year in the 10-year period ending in 2007.

Last year, some 12.8 million vehicles were sold in the United States.

J.D. Power and LMC said the outlook for 2012 sales overall remains positive as the first-quarter annual selling rate is expected to come in at 14.4 million vehicles, which is ahead of the forecast for the full year of 14.1 million.

"The first-quarter selling rate has outperformed the annual forecast for sales for the first time since 2008, when the automotive market started to decline," said Jeff Schuster, senior vice president of forecasting at LMC. "The vigorous start to 2012 suggests that there is further upside potential if the current pace continues through the summer months."

Another trend continuing in March is the demand for smaller cars given the rising gasoline prices and new models being offered by automakers, J.D. Power and LMC said. Through the first 18 days of March, subcompact and compact cars accounted for about 23 percent of retail sales, the highest level since the U.S. government's "cash for clunkers" incentive program in 2009.

(Reporting By Ben Klayman; Editing by Maureen Bavdek)