In the next 12/18 months the global car market will pull the handbrake. Demand will be weaker than expected and sector profits will contract. This is Moody's forecast, which in its latest report speaks of a double-speed Europe, a US slowdown and a Japan still tormented by the damage of the tsunami.
“We have downgraded our forecasts for global demand growth from 5,1% to 3,5% this year and from 7,4% to 6,5% next year,” Falk Frey said. vice president of Moody's Corporate finance group -. Over the next 12-18 months, lower-than-expected GDP growth in mature markets and higher interest rates imposed to bring down inflation in emerging countries, especially China and India, will weaken the credit fundamentals of this sector”.
The higher cost of raw materials will drive up the costs of car manufacturers, "eroding profit margins by 1%-1,5%" compared to the previous year. In Western Europe, the demand for light vehicles "is set to drop by less than 1% compared to the previous year, settling at 14,3 million units, or 110 units more than Moody's itself had initially forecast year assuming a decrease of 1% from one year to the next”. This is mainly “due to strong demand in France and Germany, which counterbalances and exceeds the lower than expected demand in Italy and Spain”.
According to the agency, in 2011 in Japan the drop in demand will be "equal to 16% compared to the previous year (instead of the 10,1% previously assumed) due to the earthquake and consequent tsunami that occurred in March". In 2012 “growth will be 7,3%, assuming a recovery of production in the fourth quarter of the current year and in the first quarter of 2011”.
As for the USA, Moody's has reformulated the forecasts for 2011 "lowering them from 12% to 8,1%". For 2012, growth is expected "by 16%, equal to 14,5 million units, or 500 units less than the previous forecast of 15 million vehicles sold".
