...Positive Outlook: The revision of the Outlook to Positive reflects Fitch Ratings' view that Nemak, S.A.B. de C.V.'s credit metrics should continue to strengthen over the next two to three years, as demand for the company's high value-added aluminum engine blocks and structural products should remain sound, and result in compound annual consolidated equivalent volume growth of around 3%. Much of the growth is expected to come from the company's products in Europe and Asia. The expansion of original equipment manufacturers (OEMs) in Mexico should also bolster demand. U.S. Trade Policy: Adverse U.S. trade policy against Mexico should not reverse the deeply rooted integration of the automotive industry in North America. Accordingly, Nemak's results are not expected to alter materially by the new administration's policy changes. The long average life of vehicle platforms and immediate capacity constraints in the U.S. would make production relocation cost prohibitive for OEMs. Further, the cost...
