Record Global Auto Sales Expected in 2017: Report

Record Global Auto Sales Expected in 2017: Report
Record Global Auto Sales Expected in 2017: Report

Record Global Auto Sales Expected in 2017: Report

  • Global car sales accelerated sharply in the final months of 2016, with sales supported by stronger global economic growth.
  • Gains are expected to continue, albeit more slowly over the coming year with purchases increasing to an eighth consecutive annual record.
  • Increased replacement demand in the U.S. will be complemented by a renewed sales upturn in most emerging markets; however, China is the exception, with an expected slowdown.

These are the findings in a report released Thursday by Scotiabank.

“In the United States, we see increased replacement demand, growing consumer confidence and attractive financing options, lifting sales for the third consecutive record year,” said Carlos Gomes, senior economist and auto industry specialist at Scotiabank. “Although purchases are expected to decline in China for the first time since 2008, sales in the rest of the emerging world will lead sales gains in 2017 and reverse four consecutive years of decline.”

In contrast, according to the report, after several years of record vehicle sales in Canada and Mexico, purchases are expected to edge lower in 2017.

Digital Marketing
Digital Marketing

In Canada, volumes will be undercut by recent price hikes for new cars and light trucks, as well as lower replacement demand than in the United States.

Meanwhile, slowing economic growth combined with fiscal restraint, rising interest rates and a weak currency are expected to reduce car sales in Mexico. More than 40% of the vehicles sold in Mexico are imported and the 26% plunge in the Mexican peso versus the US dollar during the first half of 2016 will likely create some sticker shock for many potential car buyers.

Sales in emerging markets have lagged in recent years, but are expected to advance in 2017, the first increase since 2012. Gains should be widely distributed, with growth expected in every region for the first time in five years.

International car sales outlook.
International car sales outlook.

Eastern Europe is likely to lead the sales gains among emerging markets, though purchases will edge higher in Asia as well, despite lower volumes in China.

The report reveals that the activity in South America will also begin to reverse the nearly 40% slump of the past three years, as double-digit declines come to an end in Brazil and purchases begin to move higher in the region’s other markets.

Peru has been the most stable auto market in South America in recent years owing to a cushion provided by the expansion of the mining sector.

Scotiabank is Canada’s international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific.

Support RMN News Service for Independent Fearless Journalism

In today’s media world controlled by corporates and politicians, it is extremely difficult for independent editorial voices to survive. Raman Media Network (RMN) News Service has been maintaining editorial freedom and offering objective content for the past more than 12 years despite enormous pressures and extreme threats. In order to serve you fearlessly in this cut-throat world, RMN News Service urges you to support us financially with your donations. You may please click here and choose the amount that you want to donate. Thank You. Rakesh Raman, Editor, RMN News Service.

RMN News

Rakesh Raman