We expect slow demand growth for global light vehicle sales at around 2%-3% in 2025 and 1%-2% in 2026 with market shares shifting to Chinese original equipment manufacturers (OEMs). Most global OEMs will struggle to expand their profit margins over the next few years since the combination of competitive pressure, low volume growth and weaker pricing will fail to support the earnings momentum observed over 2021-2023. We expect OEMs to maintain tight production levels and adjust capacity downward now that the prospect of volume growth is moving further away, to limit pricing downside and reduce fixed costs. Potential tariffs on light vehicles and parts would require price adjustments, changes to product strategy, and selective relocation, likely negatively affecting profitability and cash flow. Portfolio transition risk towards electric vehicles (EV) will persist and delaying 2025 regulatory targets in Europe could ease pressure on OEMs to push EVs (that are mostly unprofitable for now). Supplier ratings will be less resilient than OEMs since ongoing restructuring has not significantly improved deleveraging or profitability.