World auto sales expected to rise 7.0% this year

Worldwide sales of new cars are expected to rise 7.0 percent this year to 68 million units despite a 10 percent slide in Europe, a study by the AlixPartners research group predicted on Monday.

The study also forecasts that in China annual sales of new cars should hit 20 million in the next five years, two and a half times the 2007 volume.

The report attributes the projected decline in Europe to an end to government programs offering bonuses to drivers who exchanged older vehicles for new models.

Sales in North America by contrast are forecast to rise 12 percent.

The study foresees a gain in world sales to 87 million units by 2014 but adds that markets in western Europe, North America and Japan are not likely to re-gain their 2007 levels before 2014.

AlixPartners found that in North America the auto industry has undergone a vast restructuring after a sharp fall in sales to 12.7 million in 2009 from 18.9 million in 2007.

US manufacturers last year managed to generate profits that approached those of 2007 despite lower production than before the 2008 financial crisis.