Moody's: Asian auto parts sector to struggle

Moody's Investors Service said it sees a negative rating outlook for Asia Pacific's auto-parts sector over the next 12 to 18 months, but maintains a stable rating on its three rated issuers in the region.

The outlook is consistent with the rating agency's negative, medium-term forecasts for the auto-parts sectors in the United States and Europe, the agency said.

In a new report, Moody's said the rated Asian auto-parts manufacturers face significant challenges from compressed margins and slowing markets abroad, but have unique characteristics in their home markets, sales channels and cost structures that enable them to expect continued financial stability going forward.

The rated South Korean parts producer, Hyundai Mobis, and the two rated tire companies, Indonesia's Gajah Tungal and China's Giti Tire, have been able to pass on surging input prices for rubber, oil and steel to their customers, Moody's said.

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