Toyota suffers credit rating drop
Today, Fitch ratings downgraded Toyota's credit from triple-A to double-A — the first time the auto maker's rating has dropped in a decade. Steve Henn reports a lowered appetite for cars and a strong Yen are to blame.
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Scott Jagow: A company that’s relatively stable, Toyota, had its debt rating downgraded by Fitch — from Triple-A to double-A. More on that from Marketplace’s Steve Henn.
Steve Henn: The appetite for new cars is awful. Pam Murtaugh a consultant who studies consumer demand says even the best cars aren’t selling.
Pam Murtaugh: To pretend this is a slowdown is a mistake. If this is happening to Toyota, this is the auto industry driving off a cliff.
And the financial crisis hit Toyota twice. Recently, global investors looked for a safe place to stash their cash. Many of them chose Japan, and that pushed up the value of the Yen.
For Japanese exporters like Toyota, a strong Yen is actually bad news. It makes their products more expensive, and that pushes down sales. That’s why Fitch, a credit rating service, cut Toyota’s rating today.
And that make it more expensive for the company to borrow. Toyota stock price fell almost 5 percent in Tokyo on the news.
I’m Steve Henn for Marketplace.