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Global Car Sales to Rebound in Coming Months
Apr 17, 2009

The slowdown in global car sector is expected to end soon, supported by the data released for March 2009 that indicates to the rebound in car sales.

The shares of top car manufacturing companies moved up on April 2, 2009 after recording better-than-expected sales in Europe and the United States, enlightening hopes that the worldwide automobile market collapse is approaching to an end, as reported by REUTERS

According to Germany’s automotive association VDA, car sales in the country recorded a YOY increase of 40% to reach 401,000 Units in March 2009, the highest growth since 1992. A market research firm Autodata noted that in the US, 857,735 Units were sold during March 2009, a huge YOY decline of 37%, but the sales were 24.5% up from the previous month, indicating to the ending of slump in the auto market. In Europe, Italy’s new car registrations witnessed a slight month-on-month increase of 0.24% in March 2009, halting the rally of 14-month decline.  

The growth in German car sales is primarily due to the incentives given by the government to encourage buyers to scrap old cars by the fuel-efficient ones. Germany represents the biggest car market in Europe with one in five jobs originates from automobile industry in the country.

However, Germany has dominated Europe in terms of car sales, but others are also not far behind. Out of 27 EU countries, at least eight have now announced incentive schemes for their automobile sectors. In many countries, these schemes have proved to be a major success as they have observed significant increase in new registrations.

Moreover, car sales in the US in March 2009 was lower than expected; thereby, indicating that the global automobile industry is stabilizing after the collapse that pushed some car manufacturers at the threshold of bankruptcy, leaving others across the world in huge losses. Meanwhile, tax-cuts and reduction in interest rates introduced by the Indian government, made the leading car manufacturer of the country, Maruti Suzuki, to witness a third consecutive month of increase sales in March 2009. 

According to a Research Analyst at RNCOS, “Increasing momentum for adoption of incentive program, like that of Germany, latest incentives granted by Ford and General Motors, and extended financing options have propelled car sales in many countries. On a whole, the March figures have given a new impetus to the discussion that the slump may soon bottom out and car industry recovers in 2010.

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