Covid-19 has prompted Moody's Investors Service to put the entire industry on review for downgrade.  The credit rating agency has cut the ratings of nine of the 22 automakers it rated over the last three months.

Total debt downgraded was about US$130 billion, excluding the debt related to the carmakers' captive finance businesses.

"The pandemic makes auto industry even more challenging, spurs downgrades on 40% of carmakers," Moody's said in its latest report.

Automotive is among the industries Covid-19 hit hardest and the pandemic adds to what were already substantial challenges for carmakers.

"We estimate light vehicle sales will slump at least 20%  in 2020 and will take several years to recapture 2019 levels, with any turnaround slowed by a supply shock coming simultaneously with plunging demand," Moody's said.

The firm said downgraded companies had challenges before the pandemic.

Operating difficulties, the need to make significant investments, or major challenges to their market positions meant the companies downgraded were already weakly positioned in their rating categories before the pandemic.

In all cases, Moody's felt the pandemic and subsequent recession would exacerbate these problems.

The strength of automakers with confirmed ratings offer a chance for a speedier recovery, the firm said, adding that most were not downgraded.

These companies generally had track records of operational strength, little need for major restructuring, strong positions in core markets, geographic diversity or a premium brand focus and, enough liquidity to weather even an extended downturn.

Despite limited downgrades, Moody's said 18 of 22 automakers had negative or developing outlooks. This acknowledges the potentially severe damage the recession could do to operating performance and credit.