Nissan’s credit rating has taken a hit after weak U.S. sales leave investors concerned about the company’s financial future. Credit rating agency Moody’s announced the downgrade Friday.
The downgrade moves Nissan from a rating of A3 to A2, which is still an investment-grade rating. Along with the downgraded rating, Moody’s also provided a negative outlook for the automaker, implying further credit rating downgrades could happen in the future.
Nissan’s fiscal year-end was in March, when the company announced a 45 percent reduction in annual profit. During its earnings call Nissan also forecasted an additional 28 percent decline in profit during this fiscal year.
“The downgrade reflects the continuing slide in Nissan’s profitability, driven by weak sales in the U.S., its largest market,” Moody’s Vice President Motoki Yanase said in a statement reported by Reuters.
Nissan’s new strategy in the U.S. focuses on margin over sales growth, but Moody’s expects this overhaul to take “several years” before it fully takes hold.