China in Driver's Seat as Global Vehicle Sales Continue to Rise: Scotiabank

2013 Canadian Passenger Vehicle Sales Forecast Increased to a Record 1.72 Million Units

TORONTO, June 27, 2013 /CNW/ - Global vehicle sales continued to move higher in May, but the pace of growth moderated to 3.5% year over year (y/y) from an average of 5% during the previous four months, according to the Scotiabank Global Auto Report released today.

"Slower sales gains reflect a recent softening in purchases in Eastern Europe - especially Russia - and India, as well as ongoing declines in the euro zone," said Carlos Gomes, Scotiabank's Senior Economist and Auto Industry Specialist. "Canadian passenger vehicle sales have averaged an incentive-induced, seasonally adjusted annual rate of 1.75 million units in April and May, well above Scotiabank's previous full-year forecast."

Highlights in the report include:

• Scotiabank is increasing the Bank's 2013 Canadian passenger vehicle sales forecast to a record 1.72 million units, from 1.69 million.
• Scotiabank continues to forecast a 10% increase in vehicle sales in China this year as employment growth and urban income growth show no sign of abating.
• Crossover utility vehicles (CUVs) sales in China have been posting explosive growth in recent years, including a 20% surge in 2012 to 2.5 million units.
• Canada would seem to be well positioned to be a significant beneficiary of the rising popularity of crossover utility vehicles. These models account for 40% of Canadian vehicle production and their share will increase further as Toyota continues to ramp up RAV4 output in Woodstock.
• However the reality is that almost all of the crossovers produced in Canada remain in North America.

Read the full Scotiabank Global Auto Report at http://www.scotiabank.com/ca/en/0,,3112,00.html.

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SOURCE: Scotiabank

Carlos Gomes, Scotiabank Economics, [phone], [email protected]; or
Joe Konecny, Scotiabank Media Communications, [phone], [email protected].