Moody’s changes Toyota Motor’s outlook to negative from stable, despite forecasting sales to grow by one-fifth in the coming year, the rating company said on Thursday.
The change in outlook reflects the likelihood that the recovery in Toyota’s profitability will be more protracted than anticipated due to the company’s significant exposure to the strong Yen, and factors such as supply chain disruption caused by the March 11 earthquake and the recent floods in Thailand.
The Japanese automaker is particularly vulnerable to the strengthening Yen because of its greater dependence on domestic production to support sales in markets such as the US and Europe.
The rating company said In FYE3/2011, Toyota domestically produced about half of its global vehicles, while its peers such as Nissan and Honda only produced about one fourth of their total global units in Japan.
The announcement comes hours after the Japanese automaker said it plans for a comeback, targeting global sales of 8.48 million vehicles in 2012 and an even bigger number in 2013.
But highlighting the scale of the problems it has faced this year, Toyota was effectively knocked off its perch as the world’s biggest auto company by sales in 2011, as it said it expects its group global sales to fall 6% in calendar 2011 to 7.90 million vehicles.
Japan’s currency has advanced more than 8 percent in the past six months, the best performance among 10 developed-nation peers tracked by Bloomberg Correlation-Weighted Indexes.