Fitch rates Ford Otosan

Fitch Ratings said it assigned Turkey-based Ford Otosan AS a senior unsecured local currency BBB- rating with a stable outlook.

Fitch said the rating reflects Ford Otosan's position as the commercial vehicle production hub of Ford Europe in Europe, its strong brand name and Ford Otosan's access to Ford Europe's marketing and distribution network. It also takes into account the company's leading domestic market position in light commercial vehicle and in medium commercial vehicle segment, and the domestic market's favorable fundamentals.

The rating also factors in Ford Otosan's blend of local expertise with international know-how. The group's diversified export activities also act as a hedge against the volatility of the domestic economy.

In addition, the rating considers the company's strengthening operations and its growth prospects, its low-cost manufacturing base, economies of scale in material procurement, new production facility, rapid deleveraging and reduced expenditure need, following the completion of a $930 million investment program over four years.

On the other hand, Fitch said, the rating reflects volatile domestic demand, Turkey's low sovereign rating, the negative outlook on one of the major shareholders'- Ford Motor Co.'s - rating, and cyclical nature of auto demand. It also takes into account the increasing competition from rivals such as Renault, Volkswagen, PSA, Fiat and Opel, the pricing pressures in international markets as well as weak outlook for the growth of European commercial vehicle market.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.