Moody's expects that higher fuel prices could also affect suppliers that focus on automotive manufacturers.

The new report, entitled "European Auto Suppliers: Record Fuel Prices Could Hit Spare Parts Revenues", is now available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release.

"We expect motorists in Europe to increasingly adopt more energy-efficient driving behaviour or avoid using their cars to keep their fuel spending under control," says Rainer Neidnig, a Vice President - Senior Analyst in Moody's Corporate Finance Group and co-author of the report. "As this behaviour reduces wear and tear, we could see demand for replacement car equipment such as tyres and brakes to decline, at least temporarily, thereby affecting auto suppliers' aftermarket revenues."

European auto suppliers with substantial aftermarket exposure will probably experience a decline in revenues and earnings in the short term. Among its rated issuers, Moody's expects TMD Friction Group SA (B2 stable) will be the most vulnerable and lower aftermarket sales may exert pressure on its ratings. Michelin (Baa1/Prime-2 stable), Continental AG (Ba2 positive) and Hella KGaA Hueck & Co. (Baa2 stable) might also experience a decline in revenues, but should be able to offset this.

Moody's expects that higher fuel prices will have only a minor effect on Schäeffler AG (B1 positive), Valeo SA (Baa3 stable) and Rheinmetall AG (Baa3 stable), given that aftermarket revenues make up a relatively small proportion of their overall revenues. GKN Holdings plc (Ba1 positive), Autoliv ASP Inc (Prime-2 stable) and Faurecia SA (Ba3 negative) will not be affected by an aftermarket contraction, because they have virtually no aftermarket business.

High fuel costs will probably also affect demand patterns for new cars in the medium term and this could affect suppliers who supply car manufacturers, or original equipment manufacturers. However, the effect will be less clear: drivers may delay new car purchases or choose smaller cars, which will harm suppliers' revenues. On the other hand, higher fuel prices will probably accelerate demand for more fuel-efficient cars, which will help suppliers that can provide fuel-saving technology to manufacturers.

Subscribers can access this report via this link: http://www.moodys.com/research/European-Auto-Suppliers-Record-Fuel-Prices-Could-Hit-Spare-Parts--PBC_146732NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: London+44-20-7772-5456, New York+1-212-553-0376, Tokyo+813-5408-4110, Hong Kong+852-3758-1350, Sydney+61-2-9270-8141, Mexico City001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com

Rainer Neidnig Vice President - Senior Analyst Corporate Finance Group Moody'sDeutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Matthias Hellstern Managing Director Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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