European Auto Sector Review (Part II): Industry Cyclicality Commands Higher Yields; Constructive on JLR, ZF and Schaeffler Bonds on RV Basis; Cautious on Antolin, Adler Pelzer as Profitability, Cash Flows Performance Underwhelming

In part I of our European auto sector review, we discussed the turnaround of the European automotive industry after five tumultuous years dominated by the Covid-19 pandemic.

However, the industry recovery has not translated into a full credit recovery for most of the issuers under our coverage. This is particularly true for suppliers lacking pricing power and relatively weak margins, such as Grupo Antolin or Standard Profil. Among original equipment manufacturers, or OEMs, McLaren’s...