New car sales around the world will gain momentum next year after an initial recovery this year, likely setting the stage for record sales in 2011, the research arm of Scotiabank said in a report on Tuesday.
The emerging markets of China, India and Brazil will take the lead, but “the key US market” will not be far behind with an expected double-digit, 10 percent growth in auto sales, Scotia Economics said in its Global Auto Report.
“Global car sales will continue to be buoyed by the ongoing massive and synchronized monetary and fiscal stimulus,” said Carlos Gomes, senior economist of Scotia Economics.
The stimulus “has generated a global economic recovery, including improving auto lending across the globe,” Gomes said.
The report said better access to credit and the return to three percent growth in the world economy will enable next year’s car sales to recover half the ground lost over the past two years, setting the stage for record volumes in 2011.
In the US, car sales stopped declining by the middle of the year and have resumed normal annual growth rates since August as the economy experienced a “nascent” recovery, the report said.
This year, China surpassed the US as the world’s biggest car market, with sales surging by more than 40 percent to 7.3 million, with an additional 20 percent growth expected next year to almost 9 million vehicles.
In India, car sales also reached a record 1.4 million units this year, with gains accelerating sharply in the second half as credit availability improved, Scotia Economics said.
Meanwhile, General Motors Co offered deep discounts on its remaining Saturn and Pontiac vehicles as it looks to move the leftover inventory of the soon-to-be-dead brands, a report said.
The automaker will pay US dealers US$7,000 for every new Saturn or Pontiac left on their lot if the vehicle is moved to dealer-operated rental or service fleets, the Wall Street Journal said, citing a letter mailed to dealers.
This will allow dealers to sell the cars and trucks to consumers at a discount, although the vehicles would be labeled as used because the dealer would technically be the first owner.
The offer expires on Monday, the newspaper said. GM spokesman Tom Henderson confirmed the details of the incentive plan on Tuesday.
“That was the purpose of the programs — to help dealers reduce those inventories,” he said.
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