Bangkok--29 Sep--Standard & Poor's
Second-quarter financial results for U.S. auto retailers were consistent with Standard & Poor's Ratings Services' view of the sector's relative stability, according to a report, titled "U.S. Auto Retailer Credit Quality Stabilizes In Still-Fragile Economic Recovery," just published on RatingsDirect.
"Most of the retailers we rate recorded higher profitability, both year over year and since the first quarter, because of increased sales across virtually all business segments," said Standard & Poor's credit analyst Nancy Messer. The auto retailers' business model has been sufficiently resilient such that we have left ratings unchanged for all but one retailer since December 2008--while in contrast, we have downgraded many traditional auto suppliers during this time.
Still, we believe the economic recovery remains fragile and could adversely affect retailers' sales and profits in the second half of the year, especially if consumer confidence, which is already low, declines further; unemployment remains high; and prospects for long-term economic growth remain uncertain. Such trends could lead consumers to postpone car purchases and non-essential maintenance. Also, although we believe credit availability for borrowers has improved, we also believe it remains limited for those with subpar credit scores.
The report is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Nancy C Messer, CFA, New York (1) 212-438-7672
Robert Schulz, CFA, New York (1) 212-438-7808