NEW YORK--March 16, 2012: U.S. auto loan/lease credit performance continued its positive momentum in Q4'11, with strong used car prices and positive U.S. economic trends offsetting typical second-half seasonal trends, according to a new report by Fitch Ratings.
Fitch's outlook for the auto finance industry is stable for 2012, supported by Fitch's expectations for a rise in industry sales volume, solid performance of recent vintage loans and continued recovery for the U.S. economy. Most auto lenders ended 2011 by reporting their lowest delinquency and charge-offs in a decade. Fitch expects delinquency and charge-off metrics to normalize with portfolio growth as lenders loosen underwriting to increase application volume.
Fitch also expects credit performance to outperform historical levels in 2012.
Auto loan/lease origination volumes increased across most auto lender issuers, led by the recovery in U.S. auto sales. Auto sales rose for the second consecutive year to 12.7 million units in 2011, up 9.5% from 11.6 million in 2010. Sales are forecasted to hit 13.5-14 million 2012.
Access to debt markets, particularly the asset-backed securities (ABS) market, remained robust through the second-half of 2011 despite volatility in the U.S. credit markets from European debt concerns. Fitch notes that 2012 is activity is strong with auto ABS volumes reaching levels not seen since before the crisis.
The full 'U.S. Auto Asset Quality Review 4Q11' is available at Fitch Ratings.
Additional information is available at Fitch Ratings.
Applicable Criteria and Related Research: U.S. Auto Asset Quality Review 4Q11 (Solid Credit Performance Continues)
