(The following statement was released by the rating agency)
Oct 11 - Fitch Ratings expects adverse conditions in European truck manufacturers' markets to depress profitability and cash generation in 2012.
Most European truck-makers reported lower earnings from truck sales in H112 compared with 2011. Fitch expects free cash flow (FCF) generation to be challenged in 2012, in light of the continued order book deterioration and unfavourable product mix.
In a report on the industry, Fitch highlights that high dividends and capex are likely to consume weaker cash flow in 2012. Further production cuts will be necessary, in light of high inventory levels. However, the agency does not expect a broad deterioration in European truck makers' credit profiles, as companies are operationally and financially better positioned than in 2009.
The full report, 'European Truck Manufacturers: Long-Term Growth, but Short-Term Concerns' is available at fitchratings.com.
Link to Fitch Ratings' Report: European Truck Manufacturers