BUSINESS

APAC AUTOMAKERS TO STAY RESILIENT AS GLOBAL SALES GROWTH SLOWS - FITCH RATINGS

28/11/2023 12:53 PM

KUALA LUMPUR, Nov 28 (Bernama) -- The global vehicle sales will continue to grow in 2024 but at a slower pace, due to weaker economic conditions and higher interest rates, says Fitch Ratings.

“Nevertheless, we expect robust balance sheets to support most Asia-Pacific (APAC) automakers’ credit profiles. Vehicle demand in the US and Europe remained robust in 2023 despite higher interest rates, and supply constraints have eased but inventory levels remain relatively low.

“The supply and demand balance remained favourable despite higher incentive levels in 2023, especially in the US market,” it said in a statement today.

The rating agency forecasts a mild US recession in early 2024 that could pressure demand.

“However, our forecast of 16 million units, a five per cent growth from 2023, will still be well below pre-pandemic levels of 17 million. We also expect growth to slow in Europe and demand to grow by four to five per cent in 2024,” it said.

Meanwhile, sales growth of passenger vehicles in China was weaker in 2023, with high growth in new-energy vehicle (NEV) sales offsetting the decline in internal combustion engine vehicle sales.

Fitch expects the trend to continue in 2024 with passenger-vehicle sales seeing flat to low-single-digit growth.

-- BERNAMA


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