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TD Economist Predicts Spike in Auto Sales

Tuesday, 2 October 2012 11:26

A Senior TD Economist says pent up demand for new cars is about to be unleashed in the US. And that's going to be good news for local auto assembly plants over the next couple of years. That was one of the highlights from a presentation by Sonya Gulati, who delivered an economic update to the Woodstock Chamber of Commerce today. Gulati says months of below average spending in the American economy has created pent up demand, and they're getting the financing to purchase. "What we're seeing is that credit growth in the US is improved. So people being able to secure an auto financing loan for instance, that is improving as well. So now that they've gone through the leveraging process, they're able to get access to credit to buy those vehicles." Gulati says US vehicle spending is 22% below average right now, creating what she calls a coming "spring effect". "It's going to be unleashing the US consumer, particularly for the vehicle category. That's great news for production." An upswing in US vehicle purchases would be great news for the local economy, with CAMI and Toyota assembly plants already building vehicles as fast as they can. Both plants have also been rumored for possible future expansion. The majority of the vehicles they produce are exported to the US market. Overall, Gulati's economic update wasn't very encouraging from a global standpoint between the unfolding Euro crisis, uncertainty in the American economy, and domestic problems including high Canadian household debt, and government deficits. However, the prediction of a coming upswing in vehicle purchases was a definite silver lining, considering vehicle assembly is Oxford County's "wheel house".

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