Detroit Bureau on Twitter

Posts Tagged ‘toyota downgrade’

Toyota Shares Downgraded

Problems mount with global recall, China cutback.

by on Oct.11, 2012

Toyota CEO Akio Toyoda -- shown here at the launch of the Lexus GS.

Toyota Motor Co.’s comeback appears to have hit a couple of serious potholes with trouble in China and a huge and potentially expensive new recall.

In response to the new challenges, Standard & Poors has lowered its opinion of Toyota’s American Depository Shares to “Hold” from “Buy.”  Those shares are used to permit the Japanese automotive giant to trade in the U.S., as well as Japan.

“Although we have not yet quantified the financial impact, we lower our opinion to reflect headline risk we see from increased headwinds in certain parts of its operations,” Efraim Levy, S&P’s senior equity analyst, said in a note to investors.

Subscribe Now! It's Free!

Toyota had been on a roll for most of 2011, the maker’s outpacing the recovery of the overall U.S. market and posting a 41.5% jump just last month. President Akio Toyoda accompanied strong earnings news released in August by forecasting Toyota with sold nearly 10 million vehicles worldwide this fiscal year, handily out-performing the previous 9.36 million record set in 2007.


Toyota Recalling 82,000 Hybrid SUVs

Announcement follows news Toyota’s debt downgraded.

by on Jun.29, 2011

The Lexus RX400h is one of two Toyota hybrid SUVs affected by the latest safety recall.

Toyota will recall more than 82,000 hybrid SUVs sold in the United States due to potential wiring defects.

The news is another setback for the Japanese giant, which has been struggling to regain control over its quality after a series of safety-related problems that led it to recall more than 10 million vehicles last year – and which have spurred a flurry of lawsuits now working their way through the courts.

The new recall comes as the credit rating agency Moody’s Investor Services downgrades Toyota’s debt and warns that the maker’s problems may be serious enough to warrant another downgrade in the coming months.  (Click Here for that story.)

Job News!

The latest recall involves 45,500 Toyota Highlander Hybrid SUVs and 36,700 Lexus RX400h hybrid crossovers sold in the U.S. during the 2006 and 2007 model-years.

According to the maker, the hybrids may have computer boards with improperly soldered connections.  Under “high-load” driving conditions those connections could break.  In turn, a vehicle might either operate at reduced power for a short distance or coast to a stop.


Toyota Takes Hit as Debt Downgraded

Moody’s makes note of maker’s mounting problems, challenges.

by on Jun.29, 2011

Another setback for Toyota CEO Akio Toyoda.

Not long ago seen as the auto industry’s invincible 800-pound gorilla, the problems keep piling up for Toyota, and that’s worrying the folks who have to put a rating on the maker’s debt – Moody’s downgrading Toyota and warning it could cut the debt rating again in the months ahead.

The Japanese giant still commands the investment-grade rating its Detroit rivals can only dream of, but the latest move by the powerful ratings service underscores growing concerns about Toyota’s ability to cope with problems ranging from quality to new competitors, as well as the setbacks it has suffered in the wake of the March 11 disaster in Japan that will likely reduce its production this year by close to 500,000 vehicles.

It will “take some time,” a statement from Moody’s Investor Services said, for Toyota to “recover its previous strong profitability.”

Subscribe for Free!

As a result, the agency lowered from Aa2 to Aa3 – which is still its fourth-highest credit ranking.  But it follows a downgrade earlier this year by Standard and Poors, and Moody’s warned that yet another downgrade could come soon because Toyota’s ratings “incorporate one notch of support from the country’s banks and government, which are themselves under review for possible downgrade.”


Toyota Faces Ratings Downgrade

Moody’s eyes impact of March 11 disaster.

by on Apr.06, 2011

Work at Toyota plants worldwide has been impacted by the March 11 disaster in Japan.

Already slammed by the March 11th natural disaster that has left it struggling to resume normal production, Toyota may soon be hit with a ratings downgrade by Moody’s Investors Service.

Such a move could add to the maker’s costs at a time when it is struggling under the loss of hundreds of thousands of units of production.  Even before last month’s earthquake and tsunami – and the subsequent Japanese nuclear crisis – senior Toyota officials were warning that they’d need to take aggressive steps to cut costs and boost profits.

Your Workhorse News Source!

Saying it will take “many months” to get the company’s operations back to normal, Moody’s issued a warning that it is giving serious consideration to a downgrade of the maker’s debt, which currently stands at Aa2, an investment grade that Detroit’s makers can only dream of achieving.

The ratings firm did note that it, “will also consider how quickly the company can improve its profitability despite the negative impact of the disasters.”