'Indian auto sales to cushion lower sales in BRIC region'

A rebound in automobile sales in India next year is expected to mitigate the impact of declining or lower sales growth in BRIC nations, the global rating agency Moody's Investor's Service has said.

In its research report, Moody's on Monday said the global auto sales will improve in 2016 with steady growth in the US and strong sales in Western Europe.

This would mitigate the sharply lower sales in Japan and slowing growth in China.

According to Moody's, declining auto sales in Brazil and Russia will place a further drag on auto sales growth, although a rebound in India will somewhat mitigate the effect in Brazil, Russia, India, and China, or the BRIC countries.

"Although key auto markets are demonstrating very different rates of growth, aggregate global demand should continue to support a stable outlook," said Bruce Clark, a senior vice president of Moody's.

"The pronounced variance in regional demand patterns highlights the benefits of auto manufacturers maintaining a broad geographic footprint," Clark further noted.

The rating agency forecasts global light vehicle sales of 2.5 percent in 2016, an improvement from 1.2 percent in 2015.

"Despite its slowing economy, China will be a significant driver of this growth, as a looser monetary policy and stabilising real estate market push Chinese auto sales to comprise 27.8 percent of global auto sales in 2016, up from 27.1 percent of sales in 2015," Moody's said.

Although economic conditions remain challenging in China, Moody's expects the auto market to recover, with auto sales growth expected to reach 5 percent in 2016, up from 1.9 percent in 2015, according to the report "Global Automotive Manufacturers: Auto Sales to Rebound Modestly in 2016 After China Growth Slowdown".

In addition, steady growth in the US will help boost global auto sales. Although the pace of growth has slowed in the US, it remains broadly steady, slowing only slightly to 2.4 percent in 2016 from 2.8 percent in 2016.

Higher new sales growth in Europe will also contribute to the rebound in global auto sales, with sales rising 6 percent in 2015 and 2.8 percent in 2016, Moody's said.

Despite Moody's forecast for low economic growth in the euro area, double-digit demand in Spain and higher-than-expected growth in Germany, Britain, France and Italy will boost sales in the region.

However, the sharp contraction in sales growth in Japan in 2015 will offset global growth to a degree.