Scotiabank sees temporary softening in vehicle production in Canada, U.S.

TORONTO – Scotiabank Economics says robust vehicle production in Canada and the United States is expected to soften in the coming months as dealer inventories reach normal levels.

“The auto industry has been a growth leader across North America in the first half of 2012, with stronger than expected car and light truck sales and the restocking of depleted inventories by Japanese automakers buoying production gains,” Scotiabank senior economist Carlos Gomes said in a report.

“However, with inventories back at normal levels – around 60 days’ supply – vehicle assemblies are set to soften between July and September,” said Gomes, the bank’s auto industry specialist.

In the five months through May, vehicle production in North America is up 23 per cent year over year, led by a 27 per cent surge in the United States, Scotiabank (TSX:BNS) said in its Global Auto Report.

“In fact, U.S. vehicle production climbed to an annualized 10.3 million units in the opening months of 2012 – the highest level since late 2007,” the report said.

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