AUTONEWS

Credit risk of suppliers in the automotive sector is high

The prolonged shortage of semiconductors and the possibility of new pandemic waves could delay the recovery of vehicle production in 2022, worsening the credit risk situation of many suppliers, according to a report by Crédito y Caución.

In the report, released this Tuesday, Crédito y Caución considers that in addition to the scarcity of semiconductors and the possibility of new vacancies, deteriorating the credit risk situation of many suppliers, the complex supply chains in this sector are still susceptible to new interruptions. caused by protectionism and geopolitical risks, such as the trade conflict between China and the United States.

The insurer believes that after the “strong deterioration in sales in 2020 due to the pandemic, 2021 is marked by pent-up global demand for new cars”.

Low vehicle density and rising middle class offer ample scope for growth in many emerging markets,” the report states, noting that, “in more mature markets, public stimulus and programs are supporting the sector's recovery, supporting the transition to cleaner vehicles and e-mobility in many markets”.

According to the report released by the credit insurer, “the growth prospects for hybrid and electric vehicles are very solid”, predicting that the market share of this type of vehicle worldwide will reach 49% in 2030.

However, Crédito y Caución considers that the move to electronic mobility represents a major challenge for most small and medium-sized suppliers, arguing that “many may not have the technological or financial means to move up the value chain. if forced to abandon the market in the coming years”.

The situation is also complex for the big brands that, in the current race for innovation towards, for example, autonomous driving, face an increasingly strong competition from big technology companies and new companies”, the insurer also says.

In this context, the automotive sector in Portugal presents a high risk of default, as do the markets in Germany, Belgium, Brazil, Canada, South Korea, UAE, Slovakia, France, Hungary, Indonesia, Italy, Japan, New Zealand, Netherlands, Poland, Czech Republic, United Kingdom, Russia, Singapore, Thailand or Turkey.

The risk is more moderate in markets such as Australia, Austria, China, Denmark, Spain, United States, India, Ireland, Mexico, Sweden, Switzerland and Taiwan, the company said in the report.