TORONTO, Feb. 27, 2012 /CNW/ - Global vehicle sales continue to
strengthen, with volumes, excluding China, advancing six per cent above
a year earlier - the strongest gain since February 2011, prior to the
tsunami in Japan last March, according to a Scotia Economics' Global
Auto Report released today. We exclude China from last month's
performance, as sales were impacted by an early lunar New Year, and a
clearer picture of the health of the auto market in China will only
emerge once data are available for the first two months of 2012.
"Purchases in the United States jumped above an annualized 14 million
units last month, for the first time since the 'cash-for-clunkers'
program in mid-2009," said Carlos Gomes, Senior Economist and Auto
Industry Specialist, Scotia Economics. "The rebound was driven by
strengthening replacement demand and, contrary to expectations, was
accompanied by lower incentives."
"Sales in Canada also started the year on a strong note, with volumes
surging 15 per cent above a year earlier," added Mr. Gomes. "We
estimate that purchases totaled an annualized 1.70 million units in
January - the best performance since May 2008 and up from a full-year
total of 1.59 million in 2011."
Canadian business purchases led the way in January, soaring 74 per cent
above last year's depressed level. Consumer activity also improved,
posting the best January performance since 2008 - prior to the global
economic downturn. Western Canada is outperforming, led by a 22 per
cent y/y surge in Alberta. Preliminary data for February point to
continued solid gains.
Auto Production Buoys Economic Activity
Stronger-than-expected passenger vehicle sales across North America have
prompted automakers to schedule a further increase in vehicle
assemblies, providing an additional boost to an economy that has been
gaining momentum in recent months.
However, production gains are not limited to North America. Rising sales
led to double-digit year-over-year increases in vehicle assemblies in
India, Germany and the U.K. last month, while activity rebounded
sharply in Thailand following last fall's flood. Production is also
improving in Japan, with vehicle output in January posting a
double-digit year-over-year increase. Output schedules even appear to
be stabilizing in Western Europe, following a double-digit slump in
In North America, vehicle assemblies are now scheduled to climb above an
annualized 15 million units in the opening months of 2012 - the highest
level since 2007. Assembly plants in the United States will lead the
gain, with production planned to climb 14 per cent above a year
earlier. In fact, vehicle output in the United States exceeded an
annualized 10 million units in January - the highest level since early
2008, led by a 64 per cent y/y surge in car production.
Japanese manufacturers also assembled a record number of vehicles in
North America last month, as they attempt to reestablish optimal
inventories and continue to shift production from Japan to North
America to reduce the impact of a strong yen on their financial
performance. Assemblies of Japanese models in North America will climb
further in coming months as additional product is transferred to North
America from Japan. We estimate that rising vehicle output will add
nearly a percentage point to economic growth across North America in
the opening months of 2012, helping sustain the improved economic
momentum that has emerged in recent months.
The auto sector will also continue to be a source of strength over the
next several years, as foreign automakers continue to expand and build
new production facilities in North America. Once the planned expansions
by Japanese and European automakers are completed by 2014, we estimate
that North American vehicle assembly capacity will climb to 19 million
units - roughly in-line with the level prevailing nearly a decade ago
when the Detroit Three began to restructure and shutter some of their
Scotia Economics provides clients with in-depth research into the
factors shaping the outlook for Canada and the global economy,
including macroeconomic developments, currency and capital market
trends, commodity and industry performance, as well as monetary, fiscal
and public policy issues.
For further information:
Carlos Gomes, Scotia Economics, (416) 866-4735, email@example.com; or Joe Konecny, Scotiabank Media Communications, (416) 933-1795, firstname.lastname@example.org.