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Industry Report Card: Strong Euro And High Oil Prices Pile Pressure On European Auto Suppliers Dec 07
Standard & Poors, Dec 2007
Abstract
The strong euro and high oil prices will raise the pressure on European auto suppliers in 2008, adding to the adverse conditions already beleaguering the industry: intense pricing pressure in certain component segments, a stagnant market for new passenger cars in Europe and in North America, and high raw-material costs. The strong euro/weak dollar is hampering the competitiveness of European auto suppliers against their North American peers. For those suppliers that have moved capacity outside Europe to match the production with the local demand, however, the main risk is currency translation rather than mismatching in production and sales. Although companies with strong pricing power can pass on the cost of higher oil prices, reflected in higher raw-material and energy costs,...
Companies mentioned in this report are: Robert Bosch GmbH,GKN Holdings PLC,Rheinmetall AG,Continental AG,Autoliv Inc.,Knorr-Bremse AG,Compagnie Generale des Etablissements Michelin S.C.A.,Tomkins Finance Ltd.,TI Automotive Ltd.,Duerr AG,A.T.U. Auto-Teile-Unger Holding GmbH,Piaggio & C. SpA,Europcar Groupe S.A.,Delance Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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