International credit ratings agency Fitch Rating has announced that in 2016 it expects the outlook for global automotive manufacturers to be stable. This reflects Fitch’s expectations for a modest increase in global new vehicle sales, including further growth in Europe, a moderate sales increase in the US and sales growth resuming at the mid-single-digit level in China. Higher demand should offset economic weakness in a few large emerging markets, the likely gradual hike in investments and capital expenditure, and a potential increased focus on shareholder-friendly activities. Fitch also expects earnings and cash generation to remain solid in 2016 and overall liquidity to remain healthy across the sector with the vast majority of manufacturers reporting net cash or very small net debt positions.
Fitch also stated that for Japanese and South Korean automakers, the outlooks in 2016 are stable. A modest rise in global new vehicle sales will support credit profiles, despite challenging conditions in some markets and a weakening global economic outlook. The Japanese and South Korean automakers are expected to maintain strong credit metrics and robust liquidity.