Automotive Sector Rating Downgraded Due to Supplier Issues
Atradius Kreditversicherung has downgraded its industry assessment for the automotive sector. Suppliers face significant challenges, and vehicle production is projected to decline further.
Credit insurer Atradius Kreditversicherung has lowered its industry rating for the automotive sector, citing significant challenges faced by suppliers within the industry.
In Germany, passenger car production is forecast to decline again in 2021, following a 28.7% drop in 2020. The ongoing semiconductor shortage is significantly impacting production. In October 2021, domestic passenger car production fell by 38% year-on-year, while new vehicle registrations decreased by 35%.
Company profit margins remained stable in the first half of 2021, aided by a recovery in the first quarter. However, margins are expected to deteriorate in the coming months, with Tier 2 and Tier 3 suppliers anticipated to be most affected.
The report highlights the vulnerability of supply chains and the broader economic pressures facing automotive manufacturers and their suppliers.