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Auto Suppliers' 2005 Woes May Well Continue In 2006 Nov 05
Standard & Poors, Nov 2005
Abstract
The auto supplier sector has experienced an especially difficult time in 2005. Production levels for key customers Ford Motor Co. and General Motors Corp. have fallen throughout the year while these automakers reduced high levels of dealer inventory. October sales for the two companies were especially weak following the employee-discount-induced sales surge during the summer. While the discount programs were effective at reducing inventories, they also seem to have sharply reduced demand in the fall. Meanwhile, factors such as high gas prices have further hurt sales, which are expected to remain soft for the rest of the year. This raises concerns about whether automakers can achieve even slight year-over-year increases in fourth-quarter vehicle production schedules, as they had hoped. We...
Companies mentioned in this report are: Ford Motor Co.,Motors Liquidation Co. (fka General Motors Corp.),Daimler AG,Lear Corp.,Delphi Automotive LLP,Visteon Corp.,American Axle & Manufacturing Inc.
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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