Auto industry to turn around in new year: reportLast Updated: Tuesday, December 29, 2009 | 11:03 AM EST
Financial Post
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OTTAWA -- Although the auto industry has been hit hard by the recession, vehicle sales are set to gain momentum in the new year and could see record volumes in 2011, according to Scotia Economics’ Global Auto Report released Tuesday.
A cyclical recovery in global auto sales began in the spring of 2009 and will gain momentum in 2010, the report said. The emerging markets of China, India and Brazil will lead the way, but mature markets will also post gains in 2010, led by a double-digit advance in the key U.S. market.
“Global car sales will continue to be buoyed by the ongoing massive and synchronized monetary and fiscal stimulus, which has generated a global economic recovery, including improving auto lending across the globe,” Carlos Gomes, senior economist at Scotia Economics said in a release.
According to the report, improving access to credit and a return to 3% growth in the global economy will enable 2010 car sales to recapture half of the ground lost over the past two years, setting the stage for record volumes in 2011.
“In fact, we estimate that auto loans across major markets bottomed in the first quarter of 2009 and have improved consistently alongside a thawing in global credit markets and falling interest rates,” Gomes said.
A report last week from the Conference Board of Canada also said Canada’s auto industry appears to have turned a corner in the second half of 2009 and is expected to return to profitability in 2010. The report forecast Canadian auto manufacturing will deliver earnings of $263-million in 2010, after suffering a pre-tax loss of $2.3-billion in 2009.