* Mexico auto production up 16 pct
* Consumers still on fence
* August sales seen down from July
DETROIT, Aug 18 (Reuters) - Amid a stalled economic recovery and little expectation for near-term growth, J.D. Power and Associates lowered its 2011 and 2012 U.S. auto sales forecasts, the consultancy said on Thursday.
J.D. Power lowered this year’s forecast to 12.6 million light vehicle sales from a previous call of 12.9 million in the world’s No. 2 market after China and the 2012 forecast to 14.1 million from 14.7 million.
Still, the new annual forecast for 2011 is 9 percent higher than 2010.
“The economy and automotive industry continue to wrestle with a series of unsettling developments, which are now likely too strong to overcome within 2011,” said John Humphrey, senior vice president of automotive operations at J.D. Power.
“While it is not time to hit the panic button, it is clear that ascending from the recession is proving to be just as bumpy as the decline into it and a full recovery in vehicle sales is further down the road than previously thought.”
In the decade before the recent recession, U.S. auto sales averaged nearly 17 million vehicles annually. Sales were 11.6 million in 2010 and 10.4 million in 2009, the lowest in nearly three decades.
For the month of August, J.D. Power forecast U.S. auto sales at 12.1 million vehicles on an annualized basis, down from 12.2 million in July, but still up 6 percent from a year earlier.
“Without a significant increase in incentive levels or a reversal of the economic woes, there isn’t a compelling reason for those consumers sitting on the fence to return to dealer showrooms and purchase a vehicle,” said Jeff Schuster, executive director of global forecasting at J.D. Power. “There is little question that a strong level of pent-up demand exists, but economic and financial uncertainty is keeping it from being released.”
North American production rose 8 percent in the first seven months of the year, which matches the growth in U.S. production. Mexico’s production rose 16 percent, boosted by the assembly of the Fiat SpA’s FIA.MI Fiat 500, Ford Motor Co’s (F.N) Fiesta and the Volkswagen AG (VOWG_p.DE) Jetta models.
Production in Canada in the first seven months of the year was down 1 percent and was affected by the parts shortage from Japan due to the March earthquake, J.D. Power said. (Reporting by Bernie Woodall; editing by Andre Grenon)