European Automotive Manufacturers Handbook

...Rating Headroom Increasing: Fitch expects further modest improvement in rating headroom in 2018, giving companies more flexibility at current rating levels. Corporate credit profiles have strengthened across the European automotive sector since 2012-2013, driven by favourable conditions in some key markets and fundamental cost- savings undertaken by manufacturers in the face of the latest crises. However, part of the industry's financial improvement in recent years is due to cyclical factors which could reverse in the short to medium term, in particular when the recovery of new vehicle sales stalls in Europe and the US. Strategic Rethinking: We expect incumbent manufacturers to significantly increase resources allocated to changes in technology and personal mobility, which will weigh on cash flows and may affect business profiles. The sector is subject to various disruptive trends including a shift to new energy vehicles, including electrification, to autonomous vehicles, to different forms...

Compendium