Econ Research

Scotia Economics: Emerging Market Auto Sales to Climb Higher in 2010

Scotia Economics, a unit of Bank of Nova, estimates auto sales to climb further in emerging markets in its latest Global Auto Report. Mature markets are also projected to post gains.  The chart below shows the growth of auto sales in the BRIC countries vs. Western Europe and US  since 2000. Clearly emerging market is where the action is for the auto companies.

Some of the key points from the report are:

• The auto market in emerging markets will post double-digit gains this year
• The Emerging markets of Brazil, Russia, China and India will lead the way in global auto sales
• The loosening of the credit markets and low interest rates should help push auto sales
• Auto sales in China increased by more than 40% in China last year making it the largest market in the world easily exceeding the U.S. market
• Rising household income and low penetration rate will benefit car sales in China
• A new “Cash for Clunkers” program to be implemented by Russia from January this year should boost sales
• Easier credit availability, low interest rates, rising income are driving sales higher in India with a record 1.4 million sold in 2009
• Foreign automakers competing to capture the growth in Indian auto market include General Motors, Volkswagen, Suzuki and Toyota
• Rising employment growth rate and cheaper credit should help increase auto sales in Brazil to 2.7 million units in 2010
• New old car replacement programs in France and Italy will boost auto sales in those countries
• Rising confidence in the economic situation in the US and Canada will drive Americans and Canadians to the car dealerships

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