According to Scotia Economics, the global automotive scene is on the way to recovery, with the emerging markets of Brazil, China, and India leading the way and mature markets set to post gains in 2010 as well.
Scotia Economics' latest Global Auto Report indicates that automakers may be able to regain around half of the sales volume lost in 2009 next year, which might set the stage for record sales volumes in 2011. The optimistic predictions in car sales stems from improved access to credit for consumers and a return to 3 percent growth in the global economy.
Most of the increase in global automotive sales will come from emerging markets such as Brazil, China, and India. However, the Global Auto Report also indicates U.S. sales will start to recover next year. Scrappage schemes across the globe are bolstering sales in both emerging markets and mature markets and have played a key part in the auto recovery.
Carlos Gnomes, senior economist at Scotia Economics, says that key factors contributing to the predicted increase in global car sales are the pent-up demand from the economic downturn, drastically improved access to credit, and low new car prices. In addition to these factors, an increase in the selling prices of used cars, up 19 percent year-to-year, may encourage some people to trade in their current cars for a brand-new one.
“Auto financing has begun to flow again in recent months, and combined with falling interest rates, now accounts for about 75 percent of overall volumes in India,” said Gnomes. “Prospects for strong sales gains have induced major foreign automakers to increase their presence in India.”
The Chinese market is another emerging market that has seen dramatic sales increases. China’s auto sales increased by 40 percent this year to more than 7.3 million units, surpassing the U.S. to make it the largest market in 2009. Scotia Economics predicts another drastic sales increase of around 20 percent for the Chinese market.