Sales of motor vehicles in the US rose to their highest rate in 16 months in December, Reuters reported last month, with major firms predicting that 2011 will see the recovery gather pace.

US car sales rose by more than 11 per cent to just under 11.6 million vehicles in 2010, giving hope to an industry that recently witnessed bankruptcies for General Motors and Chrysler.

In December, the annualised sales rate jumped to nearly 12.6 million vehicles, the highest rate since August 2009. Chrysler saw a 16 per cent jump in sales, while Nissan and Honda were up 28 per cent and 21 per cent respectively.

Al Castignetti, the head of Nissan sales, told Reuters: "I think people are a lot more confident in making big purchases now. That's the story of the fourth quarter.

"I think we're going to see slow, steady growth."

Sales of trucks made up a significant proportion of sales for Detroit automakers, although the continued rise in the price of oil will continue to pose a problem in 2011.

Meanwhile, in Japan, Toyota and Honda saw a disappointing slide in auto sales for the fourth consecutive month, following the termination of a government subsidy programme.

Bloomberg reports that sales of cars, trucks and buses fell by 28 per cent compared with the same month in 2009 to 179,666.

Toyota, which is the world's largest automaker, sold 77,821 vehicles excluding the Lexus brand.

A government subsidy for fuel-efficient cars ended on September 6th, prompting fears that the nation could see a six-month decline in sales from October onwards, according to the Japan Automobile Dealers Association.

However, it was not all bad news for Japan's car industry for the year as a whole, as the number of new cars, trucks and buses sold in the country came to a total of 3,229,716 units, a 10.6 per cent rise from the previous year.

The success was partly attributable to the subsidy scheme, which no doubt helped Toyota's Prius hybrid maintain its position as Japan's top-selling car.

Shigeru Matsumera, auto analyst at SMBC Friend Securities, told Agence France-Presse that Japanese carmakers are looking ahead to strong performances overseas as a result of growing demand in emerging markets, particularly China.

"We forecast the sales decline will hit bottom in the January-March quarter and then be on course for moderate recovery," he said.

"But the pace of recovery fully depends on Japan's macroeconomic conditions."

However, not all emerging economics look set to make big waves in the worldwide automobile market. India, which enjoyed a record surge in 2010 with a 31 per cent rise in sales, is expected to slow significantly following a hike in interest rates this year.

Better access to financing and a wide range of models on the market helped to stimulate sales, Reuters reports, and although demand is still considered to be strong for the year ahead, India is unlikely to repeat the performance of 2010.

Sales are expected to moderate over the next 12 months, with Fitch Ratings predicting growth of 12 to 15 per cent, a performance comparable with the US market.

Tata Motors and Mahindra & Mahindra announced this month that they planned to raise prices to ward off higher input costs of steel and rubber.

"I think the robustness of demand continues," said Vaishali Jajoo, automotive analyst at Angel Broking.

"There will be a little bit of headwind going forward - increase in interest rates, little bit of liquidity concern - which may have an impact."

In Europe, registrations of new cars declined by 2.7 per cent in December compared with the same month in 2009, marking the ninth month in a row of diminishing demand.

The European Automobile Manufacturers Association said the passenger car market shrank by 4.9 per cent year-on-year to 13.8 million vehicles for the year as a whole, again attributable to the end of government-sponsored scrappage schemes across the continent.

BMW saw new registrations increase by 13 per cent in December, riding on the popularity of the Mini brand, while Volkswagen posted a 1.3 per cent drop.

Meanwhile, Fiat saw a sharp fall of 19 per cent due to weak demand in its native Italy.

Sources:



Auto sales jump, upswing seen for 2011 (4/01/11)



Toyota, Honda domestic sales slide as Japan's December car sales fall 28% (5/01/11)



Japan new car sales see first rise in seven years (4/01/11)



India auto sales set to slow after record surge in 2010 (11/01/11)



Europe car market shrinks again (14/01/11)
 

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