Fitch Ratings says in a special report that the global outlook for the automotive industry in 2009 is negative, as global auto manufacturers continue to face challenging prospects for the year to come.

"Weak GDP growth and the effects of the international financial crisis will continue to have a significant impact on the global auto industry, creating downwards pressure on carmakers' credit profiles in the short to medium term," says Emmanuel Bulle, Senior Director in Fitch's Automotive team. "In addition, the length and severity of the current crisis are still unknown, whilst manufacturers' responses to the crisis are still evolving."

While only the US automotive industry had a negative outlook at the start of 2008 - the outlook for Indian manufacturers' credit profiles was positive and Japanese, European, South Korean and Chinese manufacturers had a stable outlook - the outlook is now negative across the whole auto sector. The industry as a whole is facing an unprecedented combination of cyclical and structural issues which underpins Fitch's negative outlook overall.

In spite of recent downgrades, Fitch expects Japanese manufacturers to remain the highest-rated manufacturers. Conversely, at the other end of the spectrum, US groups remain on a negative trend, all rated 'CCC' or lower. In between, in the 'BB'/'BBB' rating categories, rating pressure on European and South Korean groups increased in 2008 and Fitch believes this is unlikely to abate in 2009.