...- The global spread of the novel coronavirus has led most car manufacturers in Europe and the U.S. to close plants. We project global sales will decline by 15% in 2020 as the COVID-19 pandemic escalates and global GDP growth trends sharply lower. We foresee a mild 6%-8% recovery in global sales volumes in 2021. - We factor a recovery in the second half of 2020 in our base case, with auto production resuming gradually in the third quarter. We acknowledge further downside risk in this scenario linked to the continued escalation of the pandemic across the major global markets and the risk of a second wave until a vaccination is available, which would necessitate reinstatement of social distancing measures. - Many speculative-grade auto suppliers in Europe, the Middle East, and Asia will face material stress on liquidity, and then likely race to secure additional funding and covenant relief in second- and third-quarter 2020, to fund significant working capital as auto production resumes. -...
