TOKYO - The head of Japan's auto-making lobby said on Thursday he feared that the U.S. market would remain weak and would not reach total sales of 11 million vehicles next year.

U.S. auto sales edged higher in November, confirming the industry is on the mend after a deep four-year downturn, but analysts cautioned that sales are coming back from historically low levels. Sluggish consumer confidence and rising unemployment could make any recovery slow and uneven.

I expect the U.S. market would be slightly better than this year, but there are fears that it won't reach 11 million, Satoshi Aoki, chairman of the Japan Automobile Manufacturers Association (JAMA), as well as Honda Motor Co, told a news conference.

U.S. auto sales are expected to end with an annual sales rate of about 10.5 million units, the lowest level since the early 1980s. Many analysts and industry executives have forecast a modest rebound next year into the 11 million to 12 million unit range.

At his final news conference for this year, Aoki said the industry lobby would announce its outlook for domestic vehicle sales for 2010 once the government had made a decision on whether to maintain or do away with an extra tax levied on car purchases.

The government is aiming to compile its budget for the fiscal year starting in April by the end of this month before submitting if for approval by parliament, which will convene in January.

Aoki said, however, that he expects the six-month extension of incentives to replace old cars with new ones to help support Japan's dwindling vehicle demand. (Reporting by Chang-Ran Kim; Editing by Chris Gallagher)

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