Fitch Ratings on Sept. 20 affirmed Toyota Motor Corp.'s long-term foreign and local-currency issuer default ratings at A+ with a stable outlook, citing the Japanese carmaker's resilient earnings and cash flows.
The rating agency highlighted Toyota's lean cost structure and strong credit profile, as well as its leading market position among global auto manufacturers and its wide product range that consists of mass-market and premium segments.
Fitch also took into account Toyota's geographical diversity, economies of scale, and its leadership in hybrid vehicles.
The agency said the carmaker's focus on environmental performance and strong new-energy vehicle capabilities provide a key competitive advantage to the company at a time of tighter regulations around the world.
Fitch said an upgrade is unlikely given the inherent volatility of the car manufacturing sector.
It said it could downgrade Toyota if EBIT margin on industrial operations sustained below 5%, if free cash flow margin sustained below 2%, if the company sees an erosion in its competitive strengths, or if it fails to maintain comfortable liquidity position.
