Growth in the global auto industry in 2013 will be constrained by sluggish demand in Europe and weakening sales in China, says Moody’s Investors Service in its Global Auto Industry Outlook published today. Moody’s outlook for the sector over the next 12-18 months remains stable.
“Although we forecast global light vehicle sales growth of 4.4% in 2012, we have revised our forecast for 2013 demand growth to 2.9% from our January forecast of 4.5%,” says Falk Frey, a Senior Vice President in Moody’s Corporate Finance Group and author of the report. ” Our growth revision is driven by weaker-than-expected demand in Europe and slowing economic pace in China.”
Moody’s forecasts that western European light vehicle demand will contract in 2013 by 3%, compared with its January forecast of 3% growth, because of weaker markets in southern Europe and in Italy especially.
Moody’s has revised lower its forecast for light vehicle demand in China, to 8.5% from its January expectation of 10% growth, in line with Moody’s revised 2013 GDP growth forecast for the country.
Moody’s expects to see more automotive manufacturers taking restructuring action to tackle overcapacity in Europe. However, any restructuring efforts will only be credit positive for European original equipment manufacturers (OEMs) if they reduce their capacities and costs to sustainable levels of demand and this leads to capacity utilisation rates of 90% or higher.