TORONTO - Global vehicle sales enjoyed a good ride this summer, up eight per cent year over year in July and August, led by a double-digit boost in South America, according to a new report from Scotiabank (TSX:BNS).
Sales also remained strong in China, up 11 per cent year over year, while softening in India and more recently in Japan with the end of government subsidies for eco-friendly vehicles.
Meanwhile, the bank says more recent figures for North America show strong sales continuing in both Canada and the United States in September after also doing well in the summer.
"In the United States, passenger vehicle sales continue to gain momentum, with purchases revving up to an annualized 14.9 million units in September," said Carlos Gomes, Scotiabank senior economist and auto industry specialist.
"That's the highest level since March 2008 and well above the average of 14.2 million units during the previous eight months."
Sales also remain solid in Canada, advancing six per cent year over year last month, and climbing to the second-highest level on record for the month of September. The annualized total of 1.67 million vehicles was in line with the average of the past year.
Meanwhile, Gomes said that after a summer manufacturing lull, auto assembly plants have started to ramp up across most of the world and will provide "a significant boost to manufacturing and overall economic activity in the final quarter of 2012."
Russia and Brazil, which has been helping fuel vehicle sales with a $10-million stimulus package, will lead the way as vehicle assemblies in both countries are scheduled to post double-digit, year-over-year increases.
"Automakers are (also) once again running their North American plants at full tilt, with several facilities either adding a third shift or scheduling overtime for the next several months to ensure that the industry has enough supply on hand to meet stronger than expected demand," Scotiabank said.
"The improvement in vehicle production will help bolster manufacturing prospects at a time when durable goods orders in other sectors have been weak," it added.
In contrast, sales in Western Europe continue to deteriorate, with preliminary sales results for September pointing to at least a 15 per cent slump across the region Ã¢ÂÂ double the 7.5 per cent decline through August," Gomes said.
"Even prior to the double-digit downturn in September, French and Italian automakers had announced work stoppages up to three weeks due to weak demand," he said.
According to the report, compounding the pain for most European mass market automakers is the loss of market share to manufacturers who have limited production in Europe.
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With more than 81,000 employees, Scotiabank and its affiliates serve some 19 million customers in more than 55 countries around the world.