Mubasher: S&P Global Ratings expects a steep negative directional pressure on the ratings of both automakers and suppliers, due to weakened market momentum as well as no indication of an upturn.

S&P predicts no growth in unit sold across the globe in 2020 and 2021, according to a statement on Monday. 

The rating agency added that any recovery may not be seen before 2021, noting that the geopolitical tensions, including those between the US and China, the US and Europe, and the US and the EU over Brexit, add another level of uncertainties. 

However, some large players have financial walls and liquidity that can counteract such challenges to a certain extent. On a global scale, around one-third of rated automakers and suppliers have negative rating outlooks. 

S&P's key assumptions include:

Global sales of light vehicles are expected to fall short of 100 million annually, approximately 8 million in 2020.

Margins are forecast to remain under pressure for automakers due to intense industry competition, trade disputes, as well as higher production and research and development costs (R&D costs) for electrification and high restructuring costs. 

Auto suppliers are likely to find it harder to meet their business s plan ambitions over 2019, owing to the declining volumes, intensifying price competition, foreign exchange volatility, rising raw material costs, and restructuring costs.