Standard & Poor's has released its forecast for

the autos and auto parts industry, which outlines a scenario of increased price competition globally for manufacturers. Reasons include continued reliance on rebates and cheap financing in the U.S., a fragmented and saturated European market, and protected markets and fierce local competition across Asia.

A critical part of the industry supply chain, auto parts suppliers, face more difficult circumstances, due in large part to the decline in vehicle production from a weakened global economy but also from ill-advised expansions and acquisitions and asbestos-related litigation

costs, according to the survey.

"The global automobile business is cutthroat," said Efraim Levy, Standard & Poor's senior equity analyst for the auto & auto parts industry and author of the survey. "The proliferation of vehicle models has contributed to increased competition and has hurt profit margins. We don't expect much improvement any time soon."

The survey looks at the issues affecting all segments of the automobile and auto parts industry in the United States, including light vehicles, auto parts (including OEMs, replacement parts, and replacement parts distribution), industry trends, niche markets, improving parts quality and use of new materials, sales trends, market share, the declining number of dealerships, and increased use of telematics in vehicles. It also looks at the global auto industry, including the impact of the auto industry on the U.S. trade deficit, Japanese competition in the U.S. truck market, and e-commerce transactions among major automakers.