(Reuters) -- European automakers' credit profiles will be helped by a modest global increase in vehicle sales, including further growth in Europe, combined with the benefits from cost saving measures, Fitch Ratings says.
Vehicle sales in Europe will rebound by 4.5 percent to 5 percent this year and increase further by 3 percent to 4 percent next year, the credit ratings agency predicts.
Europe's recovery after six years of decline is still fragile and sales growth will remain uneven in the region, Fitch said.
Restructuring and cost saving measures implemented by most automakers in the past two to three years are paying off and bolstering overall profitability- The measures should offset the fierce competition and continuous price pressure globally and the remaining production overcapacity in Europe.
However "a lack of clear and sustained economic recovery continues to hinder demand for new vehicles in Europe," the report said.