North America has posted double-digit increases in car sales so far this year, lifting purchases to their highest level since 2007 in a trend that reflects a global surge in buying, Scotiabank Economics says.
"Car sales are advancing in every region, with the exception of Western Europe," Carlos Gomes, Scotiabank Economics senior economist and auto industry specialist, said in the bank's Global Auto Report released Tuesday.
"We expect continued gains in the second half supported by record low short-and long-term interest rates in most nations, the recent acceleration in the pace of automotive lending across the globe and solid job creation in emerging markets."
Light-vehicle sales in North America have jumped 13 per cent so far this year, led by a 21 per cent surge in purchases by U.S. businesses, governments and rental car agencies.
"Purchases in Canada have been stronger than we expected this year, prompting us to increase our 2012 forecast to 1.68 million units, the second-highest annual total on record," Gomes said.
"Automakers are currently offering both 0 per cent financing and employee pricing, providing discounts up to $14,000 Cdn."
Worldwide, Scotiabank said car sales advanced six per cent in the first half of 2012, despite headwinds associated with the sovereign debt problems in Western Europe and moderation in the pace of global economic activity.
Japan and Russia are leading the way in the current buying spree, with gains of 52 and 29 per cent respectively. Western Europe continues to lag, with sales set to decline to 12.2 million units this year - the fifth consecutive slide and the lowest level since 1996.
The improvement in Japan reflects a bounce from last year's tsunamiinduced slump which slashed purchases to only 3.5 million units - the lowest level since 1986 - as well as government incentives for eco-friendly vehicles.
However, gains are expected to moderate in coming months as pent-up demand subsides and demographics undercut purchases. The number of potential car buyers in Japan is declining by almost one per cent a year, the worst demographic trend among the Group of Seven advanced economies.
Sales in Russia this year are on target to surpass the pre-crisis peak of 2.9 million sold in 2008. Volumes in Russia are expected to overtake Germany (3.2 million this year) by the middle of the decade, becoming the largest market in Europe, Scotiabank said.
The gains are being supported by government policies to increase auto financing, a rising middle class, record-high oil prices and below-average vehicle penetration.
Sales in China and Brazil have accelerated to double-digit gains in recent months, bolstered by government stimulus.
