- 17 May 2013 13:34 Nissan and CarCharging form joint venture
- 17 May 2013 13:28 Hong Kong Government to use electric motorcycles on fleet
- 17 May 2013 11:16 April sees welcome rise for EU new car sales
- 16 May 2013 13:33 VW expands China capacity with new Changsha plant
- 16 May 2013 12:18 Dacia kicks off in Denmark with Lodgy launch
Outlook is bleak for global auto manufacturers, according to Moody's
As a result, the firm has revised its rating for global auto manufacturers from positive to stable and has reduced its prediction for global demand growth to 3.5% from 5.1% for the current year and to 6.5% from 7.4% next year.
It added that weaker-than-expected gross domestic product (GDP) growth in mature markets, and rising interest rates being imposed to dampen inflation in emerging countries, especially China and India, will result in weaker fundamental credit conditions for the sector in the next 12-18 months.
Looking at Western Europe, Moody’s says it now expects light vehicle demand to fall less than 1% on the year to 14.3 million units – 110,000 units more than anticipated at the beginning of the year, and is mainly due to robust demand in France and Germany more than offsetting weaker-than-expected demand in Italy and Spain.
According to Moody’s, Japanese light vehicle demand will be down 16% on the year in 2011 due to the March earthquake and subsequent tsunami. For 2012, it forecasts 7.3% growth, due to a recovery in production in the fourth quarter of this year and the first quarter of 2012.
Moving on to the US, Moody’s says that profit growth is slowing as the structural benefits of last year disappear and it has lowered its outlook for 2011 to 8% growth compared to the 12% growth it had forecast earlier. In 2012 it expects 16% growth, to 14.5 million units – 500,000 units less than its previous expectation of 15.0 million light vehicle sales.
As well as a decline in demand, Moody’s also warned that the rising price of raw materials will squeeze margins, especially in the mass market and for small car manufacturers. It added that luxury brands will feel the effects of rising oil prices, as they feed in to rising gasoline and diesel prices and force consumers to consider more fuel-efficient models.