Auto sector on road to recovery in 2010, says Scotia Economics

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TORONTO - The latest auto industry forecast from Scotia Economics predicts a strong recovery in 2010.
The bank says a cyclical recovery in global auto sales that began in the spring of 2009 will gain momentum in the new year.
It says the emerging markets of China, India and Brazil will lead the way and the U.S. will see a double-digit advance.
The report says improving access to credit and growth in the global economy will enable 2010 car sales to recapture half of the ground lost over the past two years
This, says Scotia Economics, will set the stage for record sales volumes in 2011.
Carlos Gomes, a senior economist at Scotia Economics, says purchases will be bolstered by rising incomes, improved pent-up demand and record new vehicle affordability.
He says strengthening used car prices, currently 19 per cent above a year earlier, will also encourage some people to replace aging vehicles.
"On average seven per cent of the Canadian fleet is replaced each year," said Gomes.
"However, the scrappage rate slumped to less than six per cent in 2009, as the global economic downturn prompted Canadians to tighten their wallets and continue to drive their aging vehicles."

Organizations: Scotia Economics

Geographic location: TORONTO, China, India Brazil U.S.

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