The global auto industry will see a greater overall decline in sales in 2009 than it did in 2008, says a new report from Scotia Economics.

The report predicts that the first-half of 2009 will be particularly tough -- with "double-digit year-over-year declines" -- as the industry tries to sell cars to buyers living through simultaneous recessions in North America, Western Europe and Japan. The second-half of the year will see some level of recovery when it comes to sales, but it will not be enough to see overall growth.

For 2009, the report predicts that the industry will see an eight per cent drop in global car sales, compared to five per cent in 2008.

Senior economist and auto industry specialist Carlos Gomes said that the stimulus packages being announced by various governments will help the industry's recovery in the second half of the year.

"The accelerated pace of monetary easing by central banks around the world since early October, as well as stimulus packages being introduced by many governments, should help buoy global economic activity by the second half of 2009, leading to some stabilization in vehicle purchases," he said in the report.

The report predicts that U.S. auto sales will continue to decline in the first-half of 2009 and will see only "sub-par" improvements by the end of the year. Vehicles sales are expected to be even weaker in Western Europe and Japan.

/>Impact on Canada's auto sector/>

Gomes said that while Canadian auto sales held up better than in other markets through October 2008, they are now "being pulled lower by the global financial crisis that has spilled into this country."

Gomes said Canadian auto sales were down by 21 per cent year-to-year in December.

Canadians bought 1.64 million vehicles in 2008, which is about the same overall total as the year before, he said.

Gomes predicts, however, that only 1.475 million units will be sold in Canada in 2009, which would be the lowest level of annual sales since 1998.

The report predicts that Ontario could see a 14 per cent drop in provincial auto sales to just over 506,000 units, down from an average 594,000 units sold in each of the past five years.