December new-vehicle retail sales are expected to increase substantially compared with one year ago, indicating the continuation of the industry’s recovery, according to J.D. Power and Associates.

December new-vehicle retail sales are expected to come in at 839,600 units, which represent a seasonally adjusted annualized rate (SAAR) of 9.1 million units. Although fleet sales have been rebounding from historic lows earlier this year, December’s fleet level is projected to be down 10 percent from one year ago. As a result, total sales for December are projected to come in at 1,029,600 units, up 7 percent from December 2008.

“The market is continuing to improve, with the relative strength of December sales supporting a year-end rally,” said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. “The December selling rate is tracking at 11.2 million units—up nearly 1 million units from one year ago—which sets up 2010 for further recovery.”

On the heels of the worst economic environment since the Great Depression, the automotive market has recovered from its low point in March 2009, and has been outperforming expectations since October. Given the more robust pace and a strong December close, 2009 is projected to come in higher than previously expected, with total sales at 10.4 million units and retail sales at 8.7 million units.

“While the industry hasn’t yet received a clean bill of health, fixed costs have been trimmed at all levels, allowing for profitability—even at a reduced selling rate,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “The industry has an opportunity in 2010 to build on a series of small victories—such as improved pricing and appropriate inventory levels—to drive a stronger recovery.”

J.D. Power and Associates is maintaining its 2010 forecast at 11.5 million units for total sales and 9.5 million units for retail sales.