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The emerging markets of China, India and Brazil will lead the way in global auto sales in 2010, a report said Tuesday.

The U.S. market, meanwhile, was expected to see a double-digit increase and will lead the growth of mature markets in 2010, said the global auto report by Canadian Scotiabank Economics.

The report said that a cyclical recovery in global auto sales began in the spring of 2009 and would gain momentum in 2010.

China became the world's largest auto market in 2009, surpassing purchases in the United States. Car sales in China surged by more than 40 percent to 7.3 million units this year thanks to government incentives.

The incentives included a reduction in sales tax from 10 percent to 5 percent for small fuel-efficient vehicles with engines less than 1.6 litres.

The incentives were expected to lift sales by 20 percent to nearly 9 million units in 2010, the report said.

"Global car sales will continue to be buoyed by the ongoing massive and synchronized monetary and fiscal stimulus, which has generated a global economic recovery, including improving auto lending across the globe," said Carlos Gomes, senior economist at Scotia Economics.

"In fact, we estimate that auto loans across major markets bottomed in the first quarter of 2009 and have improved consistently alongside a thawing in global credit markets and falling interest rates," he said.

According to the report, improving access to credit and a return to 3-percent growth in the world economy will enable 2010 car sales to recapture half of the ground lost over the past two years, and set the stage for record volumes in 2011.

Auto sales in the United States have reversed the downward trend, with volumes advancing above a year earlier since August alongside a nascent economic recovery.

The report also predicted that through a vehicle scrappage program to spur the market, auto sales in Canada would reach 1.53 million units in 2010, up from 1.45 million this year.

"On average, 7 percent of the Canadian fleet is replaced each year," Gomes said. "However, the scrappage rate slumped to less than 6 percent in 2009, as the global economic downturn prompted Canadians to tighten their wallets and continue to drive their aging vehicles.


Editor: yan