TORONTO, ON--(Marketwired - May 30, 2014) - Global car sales continued to advance in April as solid gains in China, North America and Western Europe more than offset a slowdown in several emerging markets, according to the Scotiabank Global Auto Report released today.
"The auto industry in South America enjoyed rapid growth over the past decade," said Carlos Gomes, Scotiabank's Senior Economist and Auto Industry Specialist. "However, sales and production have weakened this year alongside slowing economic growth and rising interest rates since the Federal Reserve's announcement last May that it planned to begin tapering its bond purchases. We expect growth to resume in 2015, as longer-term interest rates have recently started to move lower, helping to boost economic growth, household incomes and vehicle penetration."
"Vehicle ownership remains low in South America, averaging only 166 cars and trucks per thousand people compared with a world average of 180 excluding Africa," added Mr. Gomes.
Highlights in the report include:
- Car sales in Brazil -- the largest auto market in South America and the sixth-largest in the world -- have declined 3% year-over-year through April. Volumes were undercut by a slowing economy, rising interest rates, high household debt and slumping consumer confidence, the lowest level in nearly five years.
- Chile has one of the highest per capita incomes in South America, and an above average vehicle penetration of 207 cars and trucks per thousand people. However, the country remains in the midst of a gradual deceleration, with GDP expected to ease to 3.4% this year from a decade average of 4.5%. Auto sales have declined 7% through April, but are expected to improve later this year as economic activity gets a boost from a pickup in the external growth outlook.
- Colombia has been the strongest auto market is South America this year, with sales advancing 9% through April alongside a near double-digit gain in wages and strong exports. Roughly one-third of Colombia's exports are destined to the U.S., more than double the 14% average for all of South America.
Read the full Scotiabank Global Auto Report online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.
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