US Auto

US auto suppliers outlook moves from positive to stable.

Moody’s Investors Service has revised its outlook for US automotive suppliers to positive from stable, due to growing demand for vehicle parts as sales rise in a recovering economy. The outlook reflects expectations for fundamental credit conditions in the industry over the next 12 to 18 months, specifically:

• Demand for vehicle parts in North America should gain support from rising car and truck sales, and inventory restocking by dealers.
• Modest economic growth should continue to improve consumer confidence and reduce the savings rate.
• Joblessness will remain a headwind for vehicle sales.

The US light vehicle sales forecast for 2011 has been revised upwards to 13.5 million units, an increase of 500,000. The 2010 forecast is unchanged at 11.5 million - a 10% increase from 2009.

Tim Harrod, Investor Services analyst