The proposed updated methodology can be downloaded here.

The proposed update provides increased transparency and a detailed presentation of Scope’s analytical approach for assigning credit ratings to auto suppliers. The methodology continues to be based on a modular rating approach for issuer ratings comprising an assessment of key rating factors that define a rated entity’s business and financial risk profiles, which is supplemented by supplementary rating drivers.

Summary of the proposed key changes

The proposed methodology contains the following changes:

• Extending the scope of application to global from European as the automotive supplier industry is deemed global, just like the car manufacturer industry, with no credit-relevant specifications for regional automotive suppliers;
   
• Changing the assessment of entry barriers to the industry to Medium from High in light of the dynamic changes of the industry and the high fragmentation of the market, still resulting in a BB assessment for the Industry Risk Profile;
   
• Aligning the phrasing of the qualitative assessment of market share with the definitions from Scope’s Credit Rating Definitions;
   
• Enhancing the description of volatility when assessing operating profitability;
   
• Providing reference points that we typically use when assessing innovativeness;
   
• Providing typical information and data sources used in the analytical process;
   
• Editorial changes.

Call for comments

Scope invites issuers, investors and other interested parties to comment on the methodology by 6 March 2025, as part of the agency’s ongoing commitment to transparency and open dialogue with market participants.

Please send your comments to consultation@scoperatings.com.

Scope will review and publish the content of any written response in accordance with regulatory requirements unless the respondent has specifically requested confidentiality.

Expected rating impact

No impact is expected on outstanding issuer and debt ratings.