Global Autos: 2026 Outlook (1/3) – Fundamentals

Todd Duvick, CFA - Head of Autos, CreditSights
Jim Williamson - Senior Analyst, Autos, CreditSights
Jack Hird - Analyst, CreditSights
Will Lee - Analyst, Autos, CreditSights

18 December 2025

Download the Full Report to Gain:

Insights into Global Autos: 2026 Outlook (1/3) – Fundamentals, including:

  • Light vehicle demand remains constrained globally: Affordability headwinds persist as sales stay flat despite pricing discipline from OEMs prioritizing margins.
  • Regulatory relief supports operational flexibility: Meanwhile, relaxed US CAFE standards and Europe’s modified 2035 targets reduce technology investment pressures significantly.
  • Hybrid powertrains emerge as electrification bridge: However, EV adoption stalls in developed markets while hybrids gain share amid expired incentives and consumer preferences.
  • Supplier divestitures accelerate balance sheet repair: Additionally, Forvia, ZF, Continental, and Antolin pursue aggressive asset sales to achieve critical deleveraging targets.
  • Credit ratings face mixed outlook pressures: Therefore, Stellantis downgrade risk rises while VW, BMW remain defensible despite elevated investment and China headwinds.

Executive Summary

Global light vehicle sales will remain broadly flat in 2026 as affordability constraints persist worldwide. US sales decline approximately 1% to 16.0 million units while Europe shows modest improvement.
OEMs prioritize inventory management and pricing discipline over pursuing aggressive volume growth targets in 2026. Meanwhile, US dealer inventories remain healthy at approximately 50 days supply, supporting stable pricing strategies.
Regulatory relief in US and Europe enhances operational flexibility and profitability for automotive manufacturers. Lower fuel economy standards and relaxed 2035 targets extend higher-margin ICE model lifecycles significantly.
Electrification strategies diverge regionally, with hybrid powertrains increasingly bridging consumer preferences and regulatory requirements. BEV adoption stalls in developed markets while China maintains strong NEV momentum through incentives.
Furthermore, capital markets activity focuses on refinancing €33 billion European and $64 billion US maturities. Supplier M&A centers on divestitures and deleveraging, with Continental, Forvia, and ZF accelerating sales.

Fill out the below form to view the full article:

Please note that we can only respond to valid business email addresses and the interview is already available to clients.

Recently Published

Research
US CLO New Issuance Triple A Spread
US CLO Weekly: BSL CLO new issuance rises to $3.7bn with Triple As 121-131bps as refinancings decline

US CLO Weekly: BSL CLO new issuance rises to $3.7bn with Triple As 121-131bps as refinancings decline

August 7, 20261 min Read More
PC-to-BSL Moves
US Private Credit Monthly: PC-to-BSL moves hit exodus levels in July

US Private Credit Monthly: PC-to-BSL moves hit exodus levels in July

August 7, 20261 min Read More
EMEA Debt Restructuring
EMEA SS Monthly: Controversial deals, priming moves, furious creditors, and debt-for-equity swaps punctuate July

EMEA SS Monthly: Controversial deals, priming moves, furious creditors, and debt-for-equity swaps punctuate July

August 7, 20261 min Read More
Euro IG Curve Strategy and Tactical Credit Opportunities
Euro Strategy: IG Curve Recs & Tactical Trades

Euro Strategy: IG Curve Recs & Tactical Trades

August 7, 20261 min Read More

Stay in the loop with the latest credit insights direct to your inbox