Moody’s raises U.S. auto parts suppliers outlook

NEW YORK, June 8 (BestGrowthStock) – Moody’s Investors Service
revised its outlook for U.S. automotive parts suppliers to
positive from stable on Tuesday, citing growing demand for
vehicle parts as sales rise in a recovering economy.

Moody’s revised upward its U.S. light vehicle sales
forecast for 2011 to 13.5 million units, an increase of
500,000, the report said. But the 2010 forecast was unchanged
at 11.5 million, Moody’s said, which would be a 10 percent
increase from 2009.

“Demand for vehicle parts in North America should gain
support from rising car and truck sales, and inventory
restocking by dealers,” the report said.

“Modest economic growth should continue to improve consumer
confidence and reduce the savings rate, although joblessness
will remain a headwind for vehicle sales,” the report added.

The outlook expresses Moody’s expectations for fundamental
credit conditions in the industry over the next 12 to 18
months.

While Moody’s industry outlook for North American-based
suppliers is positive, it remains negative for the industry in
Europe at this stage.

“The end of government scrappage programs and weak consumer
demand will continue to weigh on European vehicle sales and,
therefore, demand for parts,” Moody’s said.

European auto sales are likely to be down 12 percent
year-over-year in 2010 before rebounding 5 percent in 2011, the
credit ratings agency said.

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Moody’s raises U.S. auto parts suppliers outlook