AUTO: FITCH CONFIRMS RATING FOR EUROPE, FIAT ‘NEGATIVE’

Fitch confirms its rating of major European automobile manufacturers, including Fiat, whose outlook is still negative. The rating of the Turin-based automobile manufacturer remains a ‘BB+’ on the long term and a ‘B’ on the short term. Fitch uprated its outlook for Peugeot (PSA), Renault and Volkswagen, from ‘negative’ to ‘stable’ while the outlook for Daimler was uprated from ‘negative’ to ‘positive’. Emmanuel Bulle, Senior Director of Fitch for large European groups, explains that today’s uprating of the outlooks “reflects the continuous improvement of the European producers’ financial profiles since 2009, a faster than expected recovery in global sales and the revision of our credit expectations, which is key for the next 2 years”. The outlook for Fiat remains negative despite the good operating margin in 2009 and the improvement in its financial leverage, because there are still “uncertainties on the future financial set-up of the group, after Fiat’s plan to spin off some of its activities’. Fitch also deems that Fiat, Renault and PSA are the production groups that are most exposed to an eventual recession in Europe due to their exposure on the markets of .

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