Brighter sales prospects in North America and continued healthy growth in emerging markets should underpin global automakers' credit quality over the coming quarters, says Standard & Poor's Ratings Services today in the report card: "Global Automakers Are On Level Ground Despite Economic Bumps". This is despite downside risk in carmaker's operating environment, such as uncertainties in the global economy and capital markets, and in particular a vulnerable outlook for Europe.

"Demand will likely vary by region," said Standard & Poor's credit analyst Robert Schulz. "A recovery in auto demand in the US should see light vehicle registrations rise above replacement sales for the first time since 2008. Meanwhile, we estimate China's passenger car market will expand by 9% in 2012 and Latin America's by 7%. Although this is slower than previous boom years, it still represents healthy growth. "

"In Japan, too, we anticipate demand for automobiles will be 10% higher in 2012 than last year, when both the March earthquake and October flooding in Thailand (where many automakers' suppliers are based) disrupted business.

"In Europe, we assume overall sales will decline but we also envisage diverging fortunes for automakers. Those with a strong emerging market presence, particularly with commercially successful luxury bands, are likely to fare better than those still strongly depending on weaker national economies in southern Europe. "

"Many global automakers have generally healthy profits and cash balances, and credit measures are often meeting or exceeding our expectations for the respective ratings," said Schulz. "Most outlooks are now stable and this reflects our view that some flexibility in the ratings is appropriate to cushion the uncertain economic outlook."