Advanced

Automotive captives - A risky business?

Wikström, Daniel; Sundlöf, Richard and Appelqvist Nolin, Karl (2009)
Department of Business Administration
Abstract
This thesis set out with the aim of answering the question to what extent an increased dependency on auto financing has affected the likelihood of bankruptcy. A regression analysis is used to statistically measure if risk is transferred from captives to automotive manufacturing groups during the years 2002 and 2008. Measurements of credit risk in both a quantitative and qualitative manner are evaluated. Altman’s z-score is used as a quantitative measure of credit risk. A theoretical framework describing risk management and credit rating agencies approach to captives is discussed. The study suggests that observed changes in credit risk among automotive manufacturers can to a large extent be attributed to their captive activities. Based on... (More)
This thesis set out with the aim of answering the question to what extent an increased dependency on auto financing has affected the likelihood of bankruptcy. A regression analysis is used to statistically measure if risk is transferred from captives to automotive manufacturing groups during the years 2002 and 2008. Measurements of credit risk in both a quantitative and qualitative manner are evaluated. Altman’s z-score is used as a quantitative measure of credit risk. A theoretical framework describing risk management and credit rating agencies approach to captives is discussed. The study suggests that observed changes in credit risk among automotive manufacturers can to a large extent be attributed to their captive activities. Based on this conclusion, the problems of consumer related auto financing in the automotive industry is discussed in the context of the current (spring 2009) financial crisis. (Less)
Please use this url to cite or link to this publication:
@misc{1437649,
  abstract     = {This thesis set out with the aim of answering the question to what extent an increased dependency on auto financing has affected the likelihood of bankruptcy. A regression analysis is used to statistically measure if risk is transferred from captives to automotive manufacturing groups during the years 2002 and 2008. Measurements of credit risk in both a quantitative and qualitative manner are evaluated. Altman’s z-score is used as a quantitative measure of credit risk. A theoretical framework describing risk management and credit rating agencies approach to captives is discussed. The study suggests that observed changes in credit risk among automotive manufacturers can to a large extent be attributed to their captive activities. Based on this conclusion, the problems of consumer related auto financing in the automotive industry is discussed in the context of the current (spring 2009) financial crisis.},
  author       = {Wikström, Daniel and Sundlöf, Richard and Appelqvist Nolin, Karl},
  keyword      = {Automotive industry,Automotive financing,Automotive Captives,Risk Management,Credit Default,Altman z-score,Merton,KMV,Credit Rating Agencies,Credit Risk Management,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Automotive captives - A risky business?},
  year         = {2009},
}