One thing is for certain - other than death and taxes - people keep buying cars. Global car sales increased 4 percent in the first half of 2014, according to the Global Auto Report by Scotiabank.
The bank also expects auto sales around the world to reach record highs by the end of 2014 because of strong job creation, consumer confidence and overall improving financial conditions. Many financial risk indicators are at healthy levels, and the political tensions in Ukraine, the Middle East, Africa and Asia aren't enough to temper the financial improvements needed to benefit auto sales.
Countries with the most demand
The U.S. is leading North American auto sales compared to Canada and Mexico. The U.S. auto industry is improving at the fastest pace in nearly five years, according to Scotiabank, which forecasts U.S. auto sales at 16.3 million units this year and 16.8 million units in 2015. Sales in all of North America are stronger than expected, and Scotiabank increased its full-year 2014 forecast to 19.2 million units. This is the highest sales prediction since 2006.
China is leading the way in car buying across the globe, according to the report. The country's sales have risen 15 percent so far in 2014. Scotiabank predicts China's car sales will reach 18.36 million units by the end of this year.
Global auto manufacturing to increase
Since 2009, global car output has grown by 25 million units, and over the next seven years, the global auto industry is expected to grow even more, according to IHS Automotive. Vehicle output is expected to hit more than 100 million units by 2021.
The reason for this expansion is likely the continued recovery from the global economic recession. However, there's also concern the growing output and slowing demand in countries such as Brazil, Russia and India will create excess supply, CNBC reported.
While there may be too many vehicles manufactured in the future, as of right now the demand for new cars is driving production.
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