Moody’s downgrades Nissan’s rating

Moody’s cut its rating on Nissan Motor Co by one notch on Friday, citing weak sales in the United States and casting a shadow on the Japanese automaker’s move to improve its business following a decline in its annual profit.

Nissan - hit by former Chairman Carlos Ghosn’s arrest last year and troubles at its North American business - reported a 45% plunge in annual operating profit in the year ending March, and forecast a 28% drop in profit this fiscal year. Moody’s cut its rating of Nissan’s credit to “A3” from “A2”, adding that the outlook was negative.

“The downgrade reflects the continuing slide in Nissan’s profitability, driven by weak sales in the US, its largest market,” Moody’s Vice President Motoki Yanase said in a statement.

While Nissan’s new strategy focuses on margin over unit sales growth and refreshing old models to improve its brand value, the ratings agency expects the overhaul will take “several years”.

“The negative outlook on Nissan reflects execution risk as Nissan implements its business strategies globally, reforms its corporate governance and stabilises its alliance with Renault,” it said.

France’s Renault SA is the top shareholder in Nissan. Meanwhile, self-driving car startup Aurora Innovation Inc said on Thursday it would buy Montana-based Blackmore, a company that develops a detection system known as lidar, used in self-driving technology.

Aurora is among dozens of automakers and large technology companies working on self-driving car systems, and has partnerships with Byton, Hyundai Motor Co and Volkswagen to develop and test self-driving systems.

With the notable exception of Elon Musk’s Tesla Inc, most automakers have said their self-driving cars will rely on lidar.

Agencies