Small crossovers, like the Fiat 500X, will drive sales to new records globally, according to BMI Research.
Global autos sales are still expected to show a marked improvement in 2016 and the boom in auto sales should continue into 2017 as consumers globally continue to snap up small crossover vehicles, according to a new estimate from BMI Research.
Sales of new vehicles worldwide are growing 3.4% compared with 1.9% in 2015, BMI reported.
For the most part, developed states are continuing to drive this growth, particularly in North America and Europe, according to the report.
In addition, IHS Automotive said in a new report that it now anticipates that registration of passenger cars in the European Union and European Free Trade Area will increase about 5% during 2016 to almost 14.97 million units. Growth in France, Spain and Italy is contributing to the uptick in sales, IHS reported.
Meanwhile, car sales in the U.S., where growth has slowed in the second quarter after a fast start, but could set a record for the second year in a row, according to some analysts.
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The Mini Clubman and other small crossovers are leading a sales surge.
However, BMI said the growth in sales worldwide has also been given a boost by development beyond Europe and North America. “We believe this is also the year that the major emerging markets that have been in a prolonged downturn find a bottom. This is one of the key factors behind our forecast for a further improvement in growth to 4% in 2017.”
BMI added, “There are also global sales trends that we expect to continue, such as the dominance of the SUV market, which has been a long held view.
“More specifically, we expect the compact SUV/crossover market to be a segment leader and this is already reshaping some markets, such as Canada, where consumers are migrating from cars to smaller SUVs. The growth of the SUV segment is also proving to be a lifeline in markets where passenger vehicle sales would otherwise be slowing or contracting, such as China,” the BMI report noted.
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By region, the Middle East and North Africa will be the top performer in growth terms, according to BMI’s vehicle sales forecasts. However, much of the growth will be in post-sanctions Iran driving this result and that actually, many markets will contract as a result of low oil prices taking their toll on spending.
BMI estimated that Asia will have a much better distribution of growth, with only a handful of markets forecast to experience a contraction. Much of this growth is being driven by healthy private consumption, which is reflected in the passenger vehicle segment’s performance, BMI said.
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Meanwhile, sales in sub-Saharan Africa and Latin America will slow. Both regions are suffering from a drop in income in commodity-reliant markets and resulting weak currencies, BMI noted.