Nissan's Corporate Family Rating Lowered to Ba2 by Moody's

Key Highlights

• Moody's downgrades Nissan's corporate rating to Ba2, citing weak cash flow and declining profit margins.
• Nissan initiates major restructuring, including 15% workforce reduction and plant closures, amid financial challenges.

Due to Nissan Motor Co. Ltd.’s on-going challenges with major turnaround, Moody’s has changed the company’s corporate family rating from Ba1 to Ba2. The outlook shows that the financial situation is still difficult.

Dean Enjo, senior analyst and vice president of Moody’s ratings, has said that the decrease in Nissan’s rating is because the company's credit profile has weakened, with expectations for further weakness in both automotive free cash flow and EBIT margin.

Nissan revealed major plans to reduce costs because of obstacles in many important markets. The company plans to remove almost half of its manufacturing facilities worldwide and dismiss 15% of its workers. The purpose of these changes is to create a balanced financial position and lower the company’s profitability.

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Nissan’s need for restructuring is clear from the fact that even though it is the third-biggest in Japan, it has still not overcome the falling sales and stiff competition. Moody’s decision to downgrade shows that it will be hard for Nissan to stabilize financially and operationally in the competitive world auto industry.