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Double-digit vehicle sales gains resume in Asia

Staff writer ▼ | December 10, 2015
The revival in global car sales continued in October, with purchases jumping 6% over a year ago - the largest gain since December 2014, according to the Scotiabank Global Auto Report.
Asia cars
Auto industry   Scotiabank Global Auto Report
The growth was led by ongoing double-digit year-over-year increases in North America and a quickening in the pace of sales across Asia.

"While growth in car sales and economic activity has moderated across Asia this year, purchases have started to bounce back and will be buoyed in coming months by improving credit conditions, recent reductions in sales taxes in two large markets and some strengthening in the pace of economic growth," said Carlos Gomes, Senior Economist and Auto Industry Specialist at Scotiabank.

"Asia has become a key driver of global vehicle sales. The region now accounts for 40% of global motor vehicle purchases, and the recent sales acceleration is very positive for the 2016 global outlook.

"More recent data for North America point to additional solid gains, with volumes in both Canada and the United States climbing to record highs for the month of November. In Canada, car and light truck sales jumped 5% compared to a year earlier to an annualized 1.96 million units.

"In the United States, sales remained above an annualized 18 million units for a record-setting third consecutive month. This leaves the industry on target to surpass the previous annual peak of 17.35 million set in 2000."

A double-digit gain in car sales in China was a key driver of the improvement in Asia, and follows a 50% reduction in the sales tax applied on purchases of new vehicles.

The sales gain across Asia was much broader than just the improvement in China. Purchases in both India and Korea jumped 20% year-over-year and many other countries reported moderately higher volumes.

Household loan growth across Asia is now advancing at the fastest pace since mid-2014, and will support stronger global economic activity in the coming year, especially since it coincides with strengthening loan demand across the euro zone, in the United States and the United Kingdom.