TORONTO, Jan. 19, 2017 /CNW/ - Global car sales
accelerated sharply in the final months of 2016, with sales
supported by stronger global economic growth. Gains are expected to
continue, albeit more slowly over the coming year with purchases
increasing to an eighth consecutive annual record. Increased
replacement demand in the U.S. will be complemented by a renewed
sales upturn in most emerging markets; however, China is the exception, with an expected
slowdown.
"In the United States, we see
increased replacement demand, growing consumer confidence and
attractive financing options, lifting sales for the third
consecutive record year," said Carlos
Gomes, Senior Economist and Auto Industry Specialist at
Scotiabank. "Although purchases are expected to decline in
China for the first time since
2008, sales in the rest of the emerging world will lead sales gains
in 2017 and reverse four consecutive years of decline."
In contrast, after several years of record vehicle sales in
Canada and Mexico, purchases are expected to edge lower
in 2017. In Canada, volumes will
be undercut by recent price hikes for new cars and light trucks, as
well as lower replacement demand than in the United States. Meanwhile, slowing economic
growth combined with fiscal restraint, rising interest rates and a
weak currency are expected to reduce car sales in Mexico. More than 40% of the vehicles sold in
Mexico are imported and the 26%
plunge in the Mexican peso versus the US dollar during the first
half of 2016 will likely create some sticker shock for many
potential car buyers.
Sales in emerging markets have lagged in recent years, but are
expected to advance in 2017, the first increase since 2012. Gains
should be widely distributed, with growth expected in every region
for the first time in five years. Eastern
Europe is likely to lead the sales gains among emerging
markets, though purchases will edge higher in Asia as well, despite lower volumes in
China. Activity in South America will also begin to reverse the
nearly 40% slump of the past three years, as double-digit declines
come to an end in Brazil and
purchases begin to move higher in the region's other markets.
Peru has been the most stable auto
market in South America in recent
years owing to a cushion provided by the expansion of the mining
sector.
Read the full Scotiabank Global Auto Report online at:
http://www.scotiabank.com/ca/en/0,,3112,00.html.
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SOURCE Scotiabank