S&P shifts Dongfeng view to stable

S&P said it revised Dongfeng Motor Group Co. Ltd.’s outlook to stable from negative and affirmed the A ratings on the company and its guaranteed senior unsecured notes.

“We forecast the EBITDA margin of Dongfeng Motor Corp. (DFM), the parent of Dongfeng Motor Group Co. Ltd. (DFG) will sustainably stay above 8% on a proportionate consolidation basis in 2021 and 2022, amid an anticipated auto market recovery in China,” the agency said in a press release.

S&P said it forecasts the global chip shortage and pandemic-related production disruptions should not materially derail the companies’ recovery path. “Our forecasts on sales momentum assume a gradual easing of chip supply, the main cause of recent monthly sales declines.”

The outlook reflects the view that DFG and DFM will sustain their competitive market position and improve their profitability over the next 12-24 months, the agency said.

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