The updated methodology can be downloaded here.

Scope Ratings has today published its updated Automotive Suppliers Rating Methodology, which clarifies and refines its analytical approach while keeping the core principles unchanged.

Scope invited market participants to comment on the methodology until 6 March 2025. Scope did not receive comments from market participants during the request-for-comments period. The methodology is now final.

The 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.

Rating impact and reviews

The updated methodology is not expected to have an impact on outstanding ratings.

Summary of the key changes

The methodology contains the following changes:

• Extension of 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;
   
• Change in 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;
   
• Alignment of the phrasing of the qualitative assessment of market share with the definitions from Scope’s Credit Rating Definitions;
   
• Enhancement of the description of volatility when assessing operating profitability;
   
• Provision of reference points that Scope typically uses when assessing innovativeness;
   
• Provision of the typical information and data sources used in the analytical process;
   
• Editorial changes.