Fitch Ratings has maintained Toyota Motor's (TYO:7203) A+ long-term foreign and local currency issuer default ratings (IDRs) and senior unsecured rating and F1 short-term IDRs, according to a Thursday filing.
The rating actions stem from the rating agency's view of continued strength in the automaker's financial profile, due to reduced leverage, strong liquidity and steady free cash flow generation.
Profitability burdens due to tight operating conditions should be mitigated by the company's scale, diversification, solid hybrid electric vehicle (HEV) demand and controlled financial management, Fitch said.
Sustained EBIT margin on industrial operations of less than 6%, a significant decline in net cash position and a deterioration of competitive strengths and market position could trigger lead to a negative rating action, Fitch said.
Meanwhile, the rating agency does not see a possible upgrade due to a volatile auto manufacturing industry.