China and India will boost worldwide sales growth in 2017 and 2018 as the market approaches 100 million new vehicle sales despite ongoing decline in the US and UK markets, according to Euler Hermes.

In its latest Economic Outlook report, titled “The Auto World Championship”, the leading trade credit insurer concluded that the global market would grow by 2.1% this year, reaching 95.8 million in 2017 before rising to 98.2 million in 2018 (+2.5%) before topping 100 million vehicles in 2019.

But it found that financial conditions tightened in the US and a looming Brexit had adversely impacted UK purchasing power, meaning that the rises would be achieved in-spite of declines in the established market strongholds.

“Booming used car markets”, it added in a statement, would also contribute to decelerating sales growth of new vehicles.

Reporting its findings about the UK market, the Eurler Hemes report said that new vehicle sales growth is forecast to fall by 5% in 2017 (to three million vehicles) and 6% in 2018 (to 2.8 million).

It stated: “While plummeting used car prices have had a dampening effect on new vehicle sales, both markets have slowed markedly since last year under persistent Brexit uncertainty, the weak exchange rate and waning business and consumer confidence.

“With half of cars produced in the UK exported to Europe potentially impacting sales already, there may be secondary consequences with the bulk of the sector’s funding provided by EU R&D investment.

“It appears Brexit will continue to loom large, particularly in a sector where British R&D totalled just 1.8bn EUR in 2015 – the lowest of the countries reviewed.

“Nevertheless, electric vehicle sales, subsidized at a below-average 15%, have benefited from the government’s ban on the sale of diesel and petrol cars by 2040.

“Despite a patchy charging network, EV sales are expected to expand at a solid double-digit growth rate.”