Frankfurt am Main, September 17, 2012 -- Growth in the global auto industry in 2013 will be constrained by sluggish
demand in Europe and weakening sales in China, says Moody's
Investors Service in its Global Auto Industry Outlook published today.
Moody's outlook for the sector over the next 12-18 months
remains stable.
The new report, entitled "Global Automotive Manufacturers:
Sluggish European Demand Continues To Weigh On Global Auto Sales Growth",
is now available on www.moodys.com. Moody's
subscribers can access this report via the link provided at the end of
this press release.
"Although we forecast global light vehicle sales growth of 4.4%
in 2012, we have revised our forecast for 2013 demand growth to
2.9% from our January forecast of 4.5%,"
says Falk Frey, a Senior Vice President in Moody's Corporate
Finance Group and author of the report. " Our growth revision
is driven by weaker-than-expected demand in Europe and slowing
economic pace in China."
Moody's forecasts that western European light vehicle demand will
contract in 2013 by 3%, compared with its January forecast
of 3% growth, because of weaker markets in southern Europe
and in Italy especially.
Moody's has revised lower its forecast for light vehicle demand
in China, to 8.5% from its January expectation of
10% growth, in line with Moody's revised 2013 GDP growth
forecast for the country.
Moody's expects to see more automotive manufacturers taking restructuring
action to tackle overcapacity in Europe. However, any restructuring
efforts will only be credit positive for European original equipment manufacturers
(OEMs) if they reduce their capacities and costs to sustainable levels
of demand and this leads to capacity utilisation rates of 90% or
higher.
Manufacturers' profit margins are also diverging. Renault,
Peugeot and Fiat's margins will remain under pressure because of
overcapacity and low demand, especially in southern Europe.
This will also begin to weigh on German OEMs' margins. Japanese
manufacturers' margins have improved from their low after the 2011
earthquake and tsunami, but the continued strong yen will slow margin
growth. Moody's expects US manufacturers to retain similar
or slightly lower margins in the next 12-18 months but tougher
competition, slower US growth and higher losses in Europe may cause
them to erode slightly.
Moody's would consider revising the outlook to positive if the rating
agency forecast global light vehicle growth to exceed 5% in the
next two years and, assuming that capacity did not outgrow demand,
utilisation rates improved (especially in Europe) and pricing remained
firm.
Moody's would revise the outlook to negative if volume growth in
the global automotive industry fell below 2%, net pricing
declined and capacity utilisation rates deteriorated, or if the
rating agency expected operating profits to decline for any other reason.
Subscribers can access this report via this link http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_145260.
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Falk Frey
Senior Vice President
Corporate Finance Group
Moody's Deutschland GmbH
An der Welle 5
Frankfurt am Main 60322
Germany
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Eric de Bodard
MD - Corporate Finance
Corporate Finance Group
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Releasing Office:
Moody's Deutschland GmbH
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Moody's: Global auto industry likely to see reduced demand growth in 2013