Yanfeng Global Automotive Interior Systems Co. Ltd.

The stable outlook on YFAI reflects our view that the company will maintain its solid market position and low leverage over the next one to two years. Despite the auto market slowdown, YFAI's close relationship with strategic customers and its global footprint will help the company to defend its market position, in our view. We would lower the rating if YFAI's stand-alone credit profile (SACP) and its parent HASCO's group credit profile deteriorate. For HASCO, we would lower its group credit profile if the company's competitive position weakens significantly over the next one to two years. This could be indicated by a decline in its EBITDA margin approaching 6%, driven by increasing market competition or a loss of product competitiveness

...Yanfeng Global Automotive Interior Systems Co. Ltd.'s (YFAI) established global footprints and long industry experience underpin its market standing in the global auto interior sector. YFAI is a joint venture (JV) between its parent, Huayu Automotive System Corp (HASCO), and Adient PLC (Adient). The latter was formerly the auto supplies division of Johnson Controls, who has a long history in the global auto industry. As a result, YFAI inherits substantial manufacturing assets and experience from its parents, particularly from Adient. Such extensive roots enable the company to better understand market dynamics, effectively align its global resources to fast-changing requirements in the market, and neutralize demand volatility in different regions. These benefits should solidify YFAI's standing in the auto interior sector....

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