Toyota credit rating gets cut
Car sales in the US are dismal right now, and even Toyota has been hit by anorexic demand. The Japanese automaker even resorted to 0% financing on eleven of its highest-volume vehicles, and it still didn't prevent Toyota's first quarterly sales decline in seven years. Add a surging yen and high raw materials costs into the mix, and you've got enough reasons for Fitch to cut Toyota's credit rating from a flawless AAA to AA. The lowered rating means higher interest rates on loans, though at AA Toyota will still have far more attractive loan rates than Detroit automakers.Fitch cited the obvious problems with the global auto industry as the reason for the cut, and Toyota's downward adjustment of its sales and earnings surely didn't help. In many instances, when one credit rating company cuts a company's grade, the others are sure to follow. These are the same ratings agencies that maintained good credit rankings for the banks that are now receiving trillions of dollars of bailout help from the US government, so they're far from perfect. That doesn't help Toyota though, and the Japanese automaker could likely see still more cuts if the industry continues to struggle. Don't piles of cash and years and years of massive profits mean anything anymore? Thanks for the tip, Brian.
[Source: Forbes]
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Reader Comments (Page 1 of 1)
Flashpoint 8:23AM (12/01/2008)
Piles of cash and years and years of massive profits can be wiped out overnight.
Faster than that if you've got a coke habit.
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Mobius_1 1:53PM (12/01/2008)
If you tried to match this rate with a coke habit, you'd be dead.
M 8:26AM (12/01/2008)
How can this be ?????
The perfect company , that builds nothing but fuel efficient cars.
OH, I for got to mention. It makes 7 SUV models. Chevy only makes 6.
Geee!!!!!!!!!
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Flashpoint 8:39AM (12/01/2008)
Toyota is perfect?
I might have agreed if you said "Honda was Perfect" but, Toyota?
The only car they've gotten perfect in the past 10 years is the Prius. The Camry and the Corolla have gotten WORSE. Don't take my work, lookup consumer reliability surveys.
mike 8:43AM (12/01/2008)
Ahh no, Toyota build plenty of SUVs and they make a killing doing so, but they also make a killing by making small cars, and mid sized car and CUVs, compare that to GM, LOL
Colin Howe 8:55AM (12/01/2008)
I guess they need to "make cars people want to buy" huh?
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Mikeeee 9:06AM (12/01/2008)
FLASHPOINT.
Honda makes more SUV models ( 3 ) than Cadi, 2, Buick, 1, Pontiac, 1, Saturn,2, and Hummer, 2.
They Tie GMC, 3.
Heck Nissan has 5 and Lexus has 4.
So how come GM is always accused of making nothing but gas guzzlers. I guess they are the current whipping boy.
Here is some more info. Mfg's that have models that get under 15 MPG according to Motor Trend:
BMW 5
Mercedes 9
Nissan 4
Toyota 4
Chev 5
Cadi 6
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psarhjinian 9:32AM (12/01/2008)
Honda makes more SUV models ( 3 ) than Cadi, 2, Buick, 1, Pontiac, 1, Saturn,2, and Hummer, 2.
They Tie GMC, 3.
----
Boy, I hope that's irony, because it means that Honda has five (including Acura) and GM has, what, fifteen?
Toyota has nine or ten, depending on how you count the Venza.
dejal 9:09AM (12/01/2008)
The Detroit Dinosaurs wish they had Toyotas problems.
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Avinash machado 9:11AM (12/01/2008)
I thought Toyota was immune to such things. I mean it is not a inferior automaker like GM or the Ford right?
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jamie 10:52AM (12/01/2008)
I wonder how much cash Toyota burns through a month? Hmmm
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f650 10:57AM (12/01/2008)
Yea, poor bastards spending cash instead of burning through their lines of credit.
f650 11:03AM (12/01/2008)
I love how the toyota haters come out of the woodwork, just like last year when they were rejoicing that Toyota's profit dropped all the while forgetting the big three were posting billions in LOSSES.
HURRRRR Toyota's credit dropped while the big three can't borrow any more, so they're asking for a handout for the government instead. Let's all laugh at Toyota because they are in excellent financial shape!
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George 11:22AM (12/01/2008)
This seems like perfect timing. I hope that the big 3 can include this information when they submit their plans to congress. I hope they can shove this in Senator Dick Shelby's fat face. Like M and Colin said, perfect Toyota should stop making all those gas guzzling SUVs and build cars that people actually want. Wait a minute, it is probably the fault of those greedy, jet flying, incompetent CEOs. Maybe our government will pull their heads out of their asses for once and realize if the great Toyota is also struggling, there might just be something else causing the decline in vehicle sales. Probably not.
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Jeremy B 12:40PM (12/01/2008)
Dont worry toyota, this is as worse as it gets for you. Believe me, the big 3 wishes they were in your shape. They would be happy to be.
Toyota haters stay under your domestic rocks!!!
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Glenn 2:43AM (12/02/2008)
Toyota's credit rating is directly tied to the strength of the Japanese Governments credit rating.
Gee wonder why.
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