Business / Financial Markets

Moody's downgrades Toyota, Honda, Nissan as COVID-19 crisis deepens

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Moody’s Japan K.K. has lowered its credit ratings on Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., citing the negative impact of the COVID-19 pandemic.

“The automotive sector has been one of the sectors most significantly affected by the shock” from the spread of the new virus that causes the disease, given its sensitivity to consumer demand and sentiment, the major credit rating agency said.

The sector is expected to remain vulnerable to the impacts of the virus crisis, it added.

Moody’s Japan lowered its long-term rating to A1 from Aa3 for Toyota, to A3 from A2 for Honda and to Baa3 from Baa1 for Nissan.

Regarding Nissan, which had already seen global automobile sales start to decline before the coronavirus struck, Moody’s Japan said the company’s slump may continue for an extended period amid sagging demand and plant suspensions worldwide due to the virus crisis.

S&P Global Ratings has said separately that it is reviewing its credit ratings on the three major Japanese automakers for possible downgrades.

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