2016 Outlook: European Automotive Manufacturers

...Stable Outlook: Fitch Ratings' stable outlook on the European automotive sector reflects our expectations for a modest increase in global new vehicle sales, including further growth in Europe, leading to a further small improvement in key credit metrics in 2016. It also reflects uncertainties about sales development in several large emerging markets and the potential gradual hike in investments and capex, notably related to powertrain development. Further Growth in Europe: We expect new vehicle sales to increase further by about 3%-4% in Europe in 2016 following a 6%-7% rebound in 2015. However, we believe that pricing will remain under pressure as the economic recovery remains fragile in some markets and manufacturers will continue to compete aggressively for market shares. Weakening Global Demand: Fitch expects growth rates to moderate to 1.7% in the US in 2016 as we believe that sales are approaching a peak between 17.5m and 18m units. We also project sales growth in China to normalise...

Outlook