European Auto Manufacturers: Rating Drivers Monitor

...Key Rating Driver: This report highlights the most important rating driver to monitor in the next few months for each European car manufacturer. It also assesses how much headroom each company has with regards to this single factor and its other rating guidelines. Expected Rebound in Europe: At sector level, sales in Europe remain a pivotal indicator to follow as they still represent a major source of revenue for virtually all European carmakers, despite recent diversification. The companies the most exposed to the expected recovery in Europe are Peugeot SA (PSA) and Renault SA. Weak Emerging Markets: We expect sales in several emerging markets to be weak in 2015 and weigh on revenue and earnings. In particular, the expected sales fall in Russia will hit Renault while lower growth rates in China could affect premium groups. Poor sales in Latin America will be particularly negative for Fiat Chrysler Automotive NV (FCA), PSA and Renault. FX, Raw Materials Volatility: The weak euro can theoretically...

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