Record Global Car Sales Projected For 2013: Scotiabank

--  A reacceleration in China and strengthening U.S. replacement 
    demand will drive gains 
TORONTO, Dec. 27, 2012 /CNW/ - The cyclical recovery in global auto sales that 
began in mid-2009 remains intact, according to the Scotiabank Global Auto 
Report released today. Gains have averaged 7% over the past three years, 
including a 13% surge in the first year of recovery. 
"We expect a further 4% advance in 2013, driving global volumes to the fourth 
consecutive annual record," said Carlos Gomes, Scotiabank's Senior Economist 
and Auto Industry Specialist. "Global sales will be bolstered by strong 
employment growth in developing nations, record low interest rates and the 
recent acceleration in the pace of monetary expansion around the globe." 
Car sales in Canada are expected to edge up to 1.69 million units in 2013 - 
the second-highest level on record and up from 1.68 million this year. Ongoing 
employment gains - especially in Western Canada - will support the market, but 
slowing housing activity will dampen consumer confidence and household wealth, 
limiting the improvement. 
"U.S. household balance sheets have improved significantly and are currently 
at the healthiest level in a decade," said Mr. Gomes. "Households have 
deleveraged by a trillion dollars over the past four years, leaving them in 
good shape to replace many of the clunkers still on the road - the average age 
of the U.S. fleet now exceeds 11 years for the first time on record." 
In contrast, volumes across Western Europe slumped to a 19-year low in 2012 
undercut by plunging sales in the debt-ridden Mediterranean nations. However, 
purchases are likely to begin stabilizing in the core countries of northern 
Europe in coming months, as several leading indicators of economic activity 
and auto sales have started to improve. Car sales across Western Europe are 
expected to remain unchanged at 11.7 million units in 2013. 
According to the report, China is the key driver of global car sales, 
accounting for nearly 60% of the increase in world volumes over the past 
decade. An improving economic performance is expected to lead to a 
double-digit increase in car sales next year, up from a 7% advance in 2012. 
China now accounts for nearly 20% of global car sales and one-quarter of 
global volumes if trucks are included. Increasing urbanization, rising 
incomes and low vehicle penetration rates will continue to drive rapid gains 
in China's car sales over the next decade. 
Car sales in Brazil will benefit from the acceleration in the pace of economic 
growth to 3.5% in 2013 - more than triple this year's advance - largely due to 
infrastructure developments ahead of the FIFA World Cup in 2014 and the Summer 
Olympics in 2016. The central bank has slashed short-term interest rates by 
five percentage points since July 2011 to spur economic growth. 
Russia and Japan were key auto industry growth markets in 2012, with volumes 
in both nations posting double-digit increases. Much of the strength was 
provided by government incentives to purchase new vehicles. However, these 
subsidies have expired in both nations leading to a low-single digit advance 
in Russia over the coming year and declining volumes in Japan. 
After a challenging year marked by the slowest pace of economic growth in 
India since 2002 and rising inflation, the outlook for 2013 is only slightly 
better. Car sales in India are projected to advance a moderate 5% in 2013, a 
gain in line with this year's increase. A stronger performance is conditional 
on inflation pressures subsiding and enabling the central bank to become more 
aggressive in cutting interest rates. 
Scotiabank provides clients with in-depth research into the factors shaping 
the outlook for Canada and the global economy, including macroeconomic 
developments, currency and capital market trends, commodity and industry 
performance, as well as monetary, fiscal and public policy issues. For more 
Scotiabank economic publications visit,,3112,00.html. For high-resolution video 
clips visit 
Scotiabank is one of North America's premier financial institutions and 
Canada's most international bank. With more than 81,000 employees, Scotiabank 
and its affiliates serve some 19 million customers in more than 55 countries 
around the world. Scotiabank offers a broad range of products and services 
including personal, commercial, corporate and investment banking. In December 
2012, Scotiabank became the first Canadian bank to be named Global Bank of the 
Year and Bank of the Year in the Americas by The Banker magazine, a Financial 
Times publication. With assets of $668 billion (as at October 31, 2012), 
Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more 
information please visit 
Carlos Gomes, Scotiabank Economics, (416) 
866-4735,; or Devinder Lamsar, Scotiabank Media 
Communications, (416) 933-1171, 
SOURCE: Scotiabank - Economic Reports 
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CO: Scotiabank
ST: Ontario
-0- Dec/27/2012 12:00 GMT
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