Despite current volatility in financial markets and concerns over the strength of world economic growth, recovery in automotive markets is still very much under way, according to the analysts at JD Power.

“The recovery has apparently stalled given the latest developments on the US economy,” analyst Jeff Schuster told just-auto. “But we expect the recovery to continue, albeit with a flatter near term trend than previously forecast. Despite the weaker evidence on the economy of late, there are also some factors – such as the strength of pent-up and deferred demand that will act as support. The next few weeks should help us to clarfiy the extent to which consumer sentiment has really been impacted.”

According to Schuster, Executive Director of Forecasting JD Power and Associates, GM, Volkswagen , Ford and Chrysler are competing closely. Also, Toyota will be back in full production by the end of 2011.

Schuster added, “We’re definitely looking for a dog fight for that global title for the end of the year. The three of them are really going to duke it out for the remainder of the year.” He added, “The competitive environment is just so intense. Ford continues to be strong, Hyundai is a strong group. There are several very strong competitors in the in the industry.”

The natural disasters in Japan, unstable economy and high gas prices will have an impact over the expectations on performance of auto industry. Schuster said, “I think because of all these other factors going on, its clouding up the picture a little bit. But overall we are looking for the automotive recovery to progress again and continue through the remainder of the year.”

See also: COMMENT: What does turmoil in the markets mean for the auto industry?