WESTLAKE VILLAGE — New-vehicle retail sales are experiencing further recovery and strength through the first half of November, according to a monthly sales forecast developed by J.D. Power and Associates Power Information Network (PIN) and LMC Automotive.

November new-vehicle retail sales are projected to come in at 791,900 units, representing a seasonally adjusted annualized rate (SAAR) of 11.3 million units — the highest monthly selling rate in three and a half years, according to the report.

“Retail light-vehicle sales in November are outperforming expectations on a month-to-date basis, providing good news as 2011 comes to a close and the focus starts to shift to 2012,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. “The improving performance of the past three months suggests that the current momentum, primarily driven by replacement demand and improvements in vehicle availability, is not an aberration.”

Total light-vehicle sales in November are expected to come in at 975,600 units, an 8 percent increase year over year, according to the report. Fleet sales are expected to decrease by 6 percent compared with November 2010, but will account for 19 percent of total sales, according to F&I and Showroom magazine.

After a solid October and expectations for a strong November, LMC Automotive is increasing its forecast for 2011 to 12.7 million units (from 12.6 million units) for total light-vehicle sales and to 10.3 million units (from 10.2 million units) for retail light-vehicle sales. Additionally, LMC Automotive is maintaining its forecast for 2012 at 13.8 million units for total light-vehicle sales and 11.2 million units for retail light-vehicle sales.

“The upward forecast revision to 2011 represents the first increase to the forecast all year and tempers the cloud of uncertainty that has been over the automotive market for several months,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “The current recovery pace appears sustainable into 2012. As long as there is not an external shock or economic setback, the selling rate could be stable above the 14 million-unit level during the second half of 2012.”

Light-vehicle production volume in North America has increased by 920,000 units, or 9 percent through the first 10 months of 2011 compared with the same period in 2010, according to LMC Automotive. The Detroit 3 OEMs are seeing nearly a 14 percent increase in year-to-date production through October, while European OEMs are up 38 percent.

Hyundai Group production is up 48 percent after increased production of existing models and additional localization of models in 2011, according to the report. Japanese manufacturers, as a group, posted an 8 percent decline year to date in October from the same period in 2010, which can be attributed the Japan earthquake disaster and flooding in Thailand.

The impact of the flooding is expected to continue through the fourth quarter, causing further downtime to their North American operations. Toyota is recovering faster than initially anticipated, with lost volume estimated to be 5,000 units in the fourth quarter. The impact to Honda is expected to be more severe due to the location of their Thai plants. Honda’s fourth-quarter loss in North America is estimated at 35,000 units.

Overall vehicle inventory improved to a 58-day supply at the beginning of November from 50 days at the beginning of October. Car inventory improved to a 53-day supply, up from 43 days in October, while truck levels are stable with a 62-day supply.

Several manufacturers continue to remain below the industry norm of a 60-day supply: Hyundai/Kia began November with 28 days’ supply, Honda was at 37 days’ supply and BMW was at 28 days’ supply, according to the report. Despite some setbacks, the 2011 North American production outlook remains on track for 12.9 million units, an increase of nearly 9 percent from 2010. While overall production volume in 2011 is the highest since 2007′s 15 million-unit level, it remains well below the mid-15 million level during the 2001-2006 time period.

Ford Motor Co. suffered a big drop in auto quality this year, mainly due to a complicated entertainment system in its cars, while Toyota Motor Corp.’s Lexus rebounded from a poor showing last year, according to a closely watched industry study.

Lexus was once again the top-ranked car in overall quality, according to J.D. Power and Associates, which released its initial quality study on 2011-model year vehicles on Thursday. The annual ranking is based on surveys of thousands of new-car buyers and tracks the complaints they find in their first 90 days of ownership, reported The Wall Street Journal.

Honda Motor Co. placed second, followed by Honda’s Acura brand and Daimler AG’s Mercedes-Benz. General Motors Co.’s Cadillac and GMC brands improved and scored above the industry average. Chrysler Group LLC’s Chrysler brand and GM’s Chevrolet also improved from 2010 but were still below average. Chrysler’s Jeep was near the bottom and its Dodge brand was last.

The biggest surprise was the decline in the scores of Ford and Hyundai Motor Co., two companies that had climbed to near the top of the industry in quality in recent years.

In this year’s survey, Ford was knocked down to 23rd place and well below the industry’s average for complaints; a year ago it was ranked fifth in quality.

Ford’s problems seem isolated to the introduction of the MyFord Touch system, which uses a touch-screen interface to operate the entertainment and phone system, the research firm said.

“They’ve had some challenges with the [MyFord Touch] technology early on,” said Dave Sargent, a senior analyst with J.D. Power.

Ford has acknowledged that the system has quirks that need to be ironed out. “We expected mixed quality results this year,” Ford Executive Vice President Mark Fields said in a statement. He added that customers now tell it “we largely are back on track after addressing near-term quality issues with MyFord Touch and a few of our powertrains.”

Hyundai was hurt because it had two popular cars, the Sonata sedan and Elantra compact, that were new to the market, Mr. Sargent said. New vehicles in their first year on sale tend to have more defects.

In general, vehicles that were redesigned or were all-new for 2011 had worse scores than a year ago, according to the study. J. D. Power found 122 complaints for 100 redesigned vehicles covered by the survey, up from 111 in 2010. There were only 103 problems reported for every 100 vehicles that were largely unchanged from 2010, an improvement from 108 a year ago.

Lexus had the best score, with just 73 problems found in every 100 cars sold. The Japanese luxury brand had the best scores in the J.D. Power survey for several years in a row, but fell back last year amid its parent company’s troubles with unintended-acceleration complaints.

Honda had 86 problems, Acura 89 and Mercedes 94. The top 10 was rounded out by Mazda, Porsche, Toyota, Nissan Motor Co.’s Infiniti brand, Cadillac and GMC. All were above the industry average of 107 problems for every 100 vehicles sold.

The Toyota brand moved all the way up to seventh place after plunging to 21st last year. The survey’s results for Toyota last year were gathered during the height of its recall crisis for unintended acceleration and may have affected consumer attitudes, Mr. Sargent said.

Hyundai had 108 complaints for each 100 vehicles sold, one fewer than the industry average of 107.

Ford had 116 problems for each 100 vehicles.

Ford Motor Co. the second-largest U.S. automaker, said the $2.55 billion first-quarter profit it reported yesterday may be the company’s biggest this year as costs increase.

Ford will face $4 billion in higher expenses for commodities, new-product development, engineering, manufacturing and advertising this year. The company also said earnings from its Ford Credit finance unit will be $1.1 billion lower because of changes in lease depreciation and credit-loss reserves, reported Bloomberg.

“There are factors that you have to take into account as you get to the latter part of the year that will possibly result in our profits being lower than the first quarter,” Chief Financial Officer Lewis Booth said yesterday in an interview. “There are factors that we think will perhaps make the first quarter look like a very good quarter.”

Net income rose 22 percent from $2.09 billion a year earlier as fuel-efficient new models won higher prices, Dearborn, Michigan-based Ford said yesterday in a statement. Excluding some items, profit was 62 cents a share, beating the 50-cent average of 14 analysts’ estimates compiled by Bloomberg. Sales rose 4.7 percent to $33.1 billion.

The net income marks Ford’s most profitable first quarter since a $17.6 billion net income in 1998 that included a $16 billion gain from the spinoff of the First Associates Capital Corp. consumer finance unit.

Ford rose 12 cents to $15.66 yesterday in New York Stock Exchange composite trading. The shares have declined 6.7 percent this year.

Chief Executive Officer Alan Mulally has revived the automaker with a focus on fuel economy and raised U.S. prices twice this year as the cost of gasoline gained 26 percent. The prices consumers paid for Ford vehicles rose $900 million worldwide in the first quarter, the automaker said.

The cost of developing new models and improving the Ford and Lincoln brand images will add $2 billion to structural costs this year, Booth said.

“We are going to grow the business,” Booth said. “But growing the business does bring along with it some costs.”

The cost of commodities used in Ford’s cars and trucks will rise $2 billion this year, Booth said. Ford had $300 million in additional commodities expenses in the first quarter and expects an additional $1.7 billion in costs for the remainder of the year, he said.

“We’re seeing some signs of steel beginning to stabilize, the rest of commodities, given the economic activity around the world, we expect to carry on going up,” Booth said. “Even steel is stabilizing at a significantly higher level than last year.”

Ford said its quality performance in the first quarter was “mixed,” falling short of a goal to improve. The automaker said it expects a mixed quality performance for the year, instead of an improved one.

Some of the quality problems have been in the automaker’s touch-screen audio, navigation and communications system, known as MyFordTouch and MyLincolnTouch, Booth said.

“We had a bunch of issues, which were a little disappointing,” Booth said. “The quality issues were more a combination of launching a lot of new products and our volumes going up, rather than necessarily isolated on certain areas.”

Ford still hopes to do well in J.D. Power & Associates’ initial quality survey, where it was the top-ranked mainstream auto brand last year, Booth said.

Ford’s U.S. sales rose 16 percent in the first quarter, excluding the Volvo Cars unit it sold last year, and it outsold General Motors Co. (GM) last month for the second time in 13 years. Ford’s U.S. market share in the quarter fell to 16.2 percent from 16.8 percent as it cut discounts 9.1 percent while GM raised them 11 percent, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Most of Ford’s price improvement came in North America, where net prices rose $700 million on a mix of lower incentives and higher vehicle prices, the automaker said. Ford’s first- quarter sales of $33.1 billion topped eight analysts’ average estimate for $30.8 billion.

Mulally said heated leather seats are one of the top options ordered on the Fiesta subcompact, which traditionally would have been a car sold without such expensive features. As fuel prices rise, consumers are moving to smaller models while still expecting the amenities they had in larger vehicles, he said.

“This is a tremendous change in the auto industry,” Mulally said. “We believe people are making a lifestyle choice and we’re going to see that trend by consumers continue.”

The automaker boosted North American production by 14 percent to 657,000 cars and trucks. Ford has lost 12,000 to 14,000 vehicles of production in Asia this year because of the earthquake in Japan and may lose more, Booth said. There has been no lost production in North America and the quake will have no “material” impact on Ford’s earnings, Booth said.

Pretax profit in the company’s European operations more than doubled to $293 million.

Ford Credit will distribute about $3 billion to the parent company this year, up from expected distributions of about $2 billion the company projected in January, Ford said.

“Ford Credit’s leverage is very low at 7-to-1,” Booth said. “We think we need to improve Ford Credit’s leverage, and we think the auto company can use the cash.”

Ford’s automotive operations had $21.3 billion in cash on March 31, up from $20.5 billion on Dec. 31. The company, which reduced debt by $14.5 billion last year, had automotive debt of $16.6 billion, down from $19.1 billion on Dec. 31. The automaker said it reduced automotive debt by $2.5 billion in the first quarter.

Ford has more debt than rivals because it borrowed $23 billion in late 2006 before credit markets froze, allowing it to avoid the bailouts and bankruptcies that befell the predecessors of GM and Chrysler Group LLC in 2009.

DETROIT – March U.S. auto sales are expected to increase from last year despite rising gasoline prices and inventory concerns after the earthquake in Japan, J.D Power and Associates said today in a monthly report.

U.S. light-vehicle sales in March are expected to top 1.2 million units, up 9 percent from March 2010, J.D. Power said. New-vehicle retail sales alone are expected to account for an estimated 991,900 units, reported Automotive News. This represents a seasonally adjusted annual rate of 10.9 million units, up 15 percent from the rate in March last year.

Overall, J.D. Power raised its 2011 first quarter sales forecast to a 10.7 million annual rate, up from its forecast of 10.6 million made last month. Because of the strength in retail sales, J.D. Power also increased its 2011 retail sales forecast to 10.6 million units, up from 10.5 million. Its forecast for 2011 U.S. light-vehicle sales remains at 13 million units, up 11 percent from last year’s actual light-vehicle sales.

“With all the dynamic variables kind of interplaying out there right now, we still are seeing strong sales,” Jeff Schuster, J.D. Power’s executive director of global forecasting, told Automotive News.

“We’re also seeing that the likelihood of some inventory shortages is actually causing buyers to maybe push up their purchase decisions to hit the dealerships now while there still is inventory on some of the models that may be in short supply, so March could be getting a boost from that as well.”

General Motors Co. sales, which were bolstered by incentives in February, could see a decline in March with the conclusion of lease pull-aheads and lower dealer cash incentives, said Jesse Toprak vice president of TrueCar.com.

The fact that some customers moved up their purchase decision because of the incentives could also harm the automaker’s sales, possibly allowing an opening for Ford Motor Co.

“Ford could actually outsell GM in March,” said Toprak. “It’ll be close.”

Industry wide, lower sales numbers from decreased incentives are normal, even during periods of recovery, said Schuster.

“That’s pretty typical that when you ratchet back on incentive levels or don’t continue to increase them there can be a payback from that,” he said.

Some top-selling imports affected by the crisis in Japan are the Toyota Prius, Nissan Rogue and Honda Fit. In addition, GM has suspended production of the Chevrolet Colorado and GMC Canyon compact pickups at its Shreveport, La., plant because of parts shortages from Japanese suppliers.

“I don’t think we’ll see any substantial impact this month but assuming because of the lag in getting the vehicles here, we’re likely to see some inventory shortages in April and May and possibly even beyond that,” Schuster said. “Some of the boost that we are seeing now, there could be some payback in the next couple of months.”

U.S. light-vehicle sales for March are expected to be 1,205,200 units, with fleet sales accounting for 18 percent of the total, down from 20 percent in February. The estimate is based on the expectation that Japanese automakers will send more vehicles into the retail market in case of inventory shortages, Schuster said.

“It’s much easier to delay a fleet sale, especially if it’s a rental car sale, and get that volume to the retail market than it is to do the opposite,” he said.

To make its forecast, J.D. Power examines transactions at 8,900 U.S. retail franchises during the first 17 selling days of the month.

Last month, North American light-vehicle production was 1.06 million units, 15 percent higher than in February 2010. But J.D. Power said March production already is taking a hit because of the disaster in Japan.

Schuster said the Japan disaster’s effect on production might linger into April and May, but for now “our 2011 production forecast remains at 12.9 million units, as we expect any lost volume would be made up later in the year.”

February was a strong month for the auto industry with vehicle sales soaring in the wake of continued economic recovery and incentives. This month, J.D. Power’s seasonally adjusted annual rate forecast dropped from the February forecast of 11.1 million units.

As a result of last month’s strong sales, J.D. Power says days’ supply fell to 60 says, from 71 days at the end of January. Schuster said strong March sales and supply constraints from Japanese imports would continue to drop inventory numbers and automaker incentives in the coming months.

“Inventory was kind of in check even before this [Japanese] situation and before March was showing it was going to be a relatively strong month, so we definitely expect to see inventory at very low levels coming out of March,” he said. “We would expect incentive levels industrywide to fall in March and certainly as we go into April because the inventory simply isn’t there.”

DETROIT – Ford Motor Co.’s Lincoln brand ranked highest in an annual vehicle-dependability survey, the first time in four years an American nameplate has taken the top spot.

The survey, which measures problems experienced by original owners of 2008 model vehicles, found Lincoln leading the pack with the least amount of troubles, according to J.D. Power and Associates which questioned 43,700 owners, reported The Wall Street Journal.

Lexus, Jaguar, Porsche and Toyota rounded out the top five spots. Mini was the worst in dependability followed by Jeep, Land Rover, Dodge and Chrysler, according to the survey.

General Motors Co.’s Chevrolet brand was the biggest mover jumping up eight spots over last year as the number of reported problems fell. Driving the change were improvements made to the Silverado pickup truck.

“The 2011 study is of 2008 model year vehicles so the immediate impact here really is on the used-car market, although auto makers use these insights to make improvements on vehicles being built today,” said J.D. Power spokesman John Tews. “Many of the new cars that are now being sold have improved from 2008.”

The results are likely to give Ford a shot of good news as it works to revive the Lincoln brand by moving it upscale. Ford is in the midst of cutting its Lincoln network while asking current dealers to upgrade their dealerships. This is the first time since the survey began in 1990 that Lincoln has held the top spot by itself. Lincoln and Buick both tied as the survey leaders in 2007.

Chrysler Group LLC, meanwhile, has already revamped its entire product lineup by upgrading 16 of its models last year. The company, under the direction of Chief Executive Sergio Marchionne, improved everything from interiors to ride handling.

New-vehicle shoppers consider long-term quality and dependability when making a purchase. In the survey, the owners were asked about any problems they experienced with their vehicles ranging from engine and transmission troubles to battery replacement. The brands were scored based on the number of reported problems per 100 vehicles.

Lincoln had 101 problems per 100 vehicles followed by Lexus with 109; Jaguar with 112; Porsche with 114; and Toyota with 122. The industry average was 151.

On the opposite end, Mini was 221 problems per 100 vehicles, followed by Jeep with 214; Land Rover with 212; Dodge with 206 and Chrysler at 202.