US sales to lead 5% increase in world car market

THE world car market is poised to grow 5 per cent from last year's six- year low, with sales in the US expected to reach a cyclical peak.

DRI/McGraw-Hill predicts that car sales worldwide will reach 34.95 million this year, up from 32.15 million in 1993, fuelled largely by recovery in the US. But it warns that the US boom could peter out towards the end of the year as higher interest rates start to bite and the running is taken up by Europe, Japan and some of the developing markets.

Sales in western Europe are expected to rise 3 per cent this year, after last year's 15 per cent fall. The UK and Scandinavia will show the strongest growth, while Germany and Italy continue to contract. The introduction of scrapping incentives for old cars has triggered recovery in France and Spain.