a cura di Standard & Poor’s
Variations in the economic health and prospects of regional auto markets around the world are generally counterbalancing each other, with auto sales rising in the highly competitive U.S. and European markets while China’s economic woes contribute to weaker sales locally and set the stage for fiercer competition and earnings pressure in 2016, according to a recent report published by Standard & Poor’s Ratings Services.
Japan’s auto market remains sluggish, but a weaker yen has made it easier for Japanese carmakers to compete on exports until recently. The economically sensitive heavy truck sector is similarly tied to evolving regional economic conditions.
Eighty percent of all Standard & Poor’s rated auto companies globally have stable outlooks. “The overall credit outlook for the global auto industry remains stable, but upside potential will likely be limited and reflect company-specific issues, such as asset disposals or heavy restructuring,” said Standard & Poor’s credit analyst Eric Tanguy. “And the recent emissions manipulations at Volkswagen demonstrate that company-specific developments can also rapidly erode a company’s credit standing”.
Standard & Poor’s expects global auto sales growth of about 2% in 2015 and about 3% in 2016 as global light-vehicle sales hover above 90 million units. Most macroeconomic indicators that affect the sector, such as GDP, point to continued growth over the coming 12 months.
Slowing growth in car sales in China will likely weigh on the profitability of those automakers most exposed to the market. “While the impact of lower sales volumes should be manageable for nondomestic original equipment manufacturers and suppliers, in several cases, Chinese sales are more profitable than the average,” Mr. Tanguy noted. “The impact on earnings could therefore be more detrimental. One mitigating factor, though, is that China’s slowdown should give companies an opportunity to reduce their capital expenditures locally to offset the lower cash generated in the region”.
Following the recent emissions manipulations at Volkswagen, Standard & Poor’s expects regulators will heighten scrutiny on emission levels throughout the industry. “In particular, we expect a new impetus for initiatives to test engines’ efficiency under realistic driving conditions, and independent monitoring,” Mr. Tanguy said.