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.
The Toyota Venza is showed during the Los Angeles Auto show (Gabriel Bouys/AFP/Getty Images)
More on Auto Industry
TEXT OF STORY
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.
Comments
Comment | Refresh
From San Jose, CA, 11/26/2008
Kai....your awesome....I could listen to you all day!
Great show! I love your presentation, depth of coverage and sense of humor. Stay well...have a great holiday.
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.