North American auto sales highest since 2007; global sales up 6%
August 14, 2012
By The Canadian Press
North America is posting 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, according to a new report from Scotiabank Economics.
“Car sales are advancing in every region, with the exception of Western Europe,” Carlos Gomes, Scotiabank Economics senior economist and auto industry specialist, says 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 added.
“Automakers are currently offering both 0 per cent financing and employee pricing, providing discounts up to C$14,000.”
The report comes just as the Canadian Auto Workers union sits down this week with the Big Three North American automakers to discuss labour contracts.
The union was holding meetings the General Motors Canada on Tuesday morning in Toronto, followed by Chrysler Canada in the afternoon. Ford Canada and the CAW are to meet Wednesday.
The union, which made concessions when the big U.S.-based automakers were struggling, says it wants to share in the profits now that the industry has rebounded. For its part, the industry wants to bring its Canadian costs in line with those in the United States.
Worldwide, Scotiabank says car sales advanced six per cent in the first half of 2012, despite the ongoing 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.
In contrast, Western Europe continues to lag, with sales set to decline to 12.2 million units in 2012 – the fifth consecutive slide and the lowest level since 1996.
The improvement in Japan reflects a bounce from last year’s tsunami-induced slump which slashed purchases to only 3.5 million units – the lowest level since 1986 – as well as government incentives for eco-friendly vehicles.