BMW expects a slower recovery in 2010 US car sales than anticipated just a few months ago with consumer debt remaining a drag on the developing rebound, the automaker's president for North America has said.

"I think it will be a slower recovery than I had originally anticipated," Jim O'Donnell told the Reuters Autos Summit in Detroit.

"There is here still is a lot of consumer debt out there," O'Donnell said. "That is keeping the average consumer from going out and making big purchases."

O'Donnell said he expected the US market would recover to top 11m vehicles in 2010 compared with just over 10m expected this year.

BMW had forecast 2010 sales of 11.5 million units as late as September, but O'Donnell said now that was more likely to represent the top of the potential sales range for next year.

He said BMW's competitors in the luxury segment, Mercedes and Lexus, were cutting prices despite the declining dollar, with average reductions on Mercedes' new E class of 8%.

"Now that's significant wherever you are against the backdrop of a declining dollar. You've almost got deflation in prices, not inflation," O'Donnell said. He added that BMW would keep an eye on the marketplace but did not plan to follow suit. "That's a slippery slope," he said.

He said that globally there was still a lot of overcapacity in the industry. "It's clear a lot more capacity could come out. Nobody has really disappeared," O'Donnell said.

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