By Kevin Krolicki

DETROIT (Reuters) - Major U.S. auto dealerships see only a grudging recovery in demand in 2011, a cautious outlook at odds with the consensus view that the battered industry could see a double-digit percentage rebound.

"We can feel that there is demand, but it is very cautious demand," Asbury Automotive Group <ABG.N> Chief Executive Officer Charles Oglesby said in an interview on Thursday.

Asbury, which ranks sixth in sales among U.S. dealerships, said it was basing its own planning decisions on the view that 2010 U.S. auto sales would be only flat with the 10.5 million vehicles projected for this year.

"While that may prove to be conservative, we feel that's the prudent way to run the business," Asbury Chief Financial Officer Craig Monaghan also told Reuters.

That view echoed the line taken earlier this week by Sonic Automotive <SAH.N>. The No. 3 U.S. auto retailer also set its 2010 industry sales forecast at 10.5 million vehicles.

That is sharply lower than most industry forecasts, including those from major auto manufacturers.

CSM Worldwide has forecast industrywide U.S. sales of 11.8 million cars and light trucks for 2010, while J.D. Power is expecting 11.5 million.

Ford Motor Co <F.N>, the only U.S. automaker to avoid bankruptcy and the most bullish in its projection for a recovery, has forecast sales of more than 12 million.

General Motors Co <GM.UL> has said it expects sales of about 11.5 million vehicles in the United States next year.

The gap between the outlook of auto retailers and major manufacturers could be an issue for the industry as dealerships look to restock inventories that plunged to record lows this summer in the wake of the brief boom touched off by the U.S. government's "Cash for Clunkers" sales incentive program.

Automakers are in the process of setting production plans for next year. If the industry fails to see the stronger growth expected, it could force automakers to discount more heavily, a step that those based in the United States have vowed to avoid.

Both GM and Chrysler went through government-funded bankruptcies this year to slash their operating costs and give them flexibility to run factories at lower volumes.

AutoNation <AN.N> CEO Mike Jackson said he believed the industry's crisis this year and the changes made under pressure from U.S. officials had killed a failed "push" model in which automakers set output targets without regard to demand. Continued...