Moody's upgrades Nissan's credit rating

Moody's on Thursday upgraded its rating on Nissan Motor, citing its profitability and global market position after the automaker bucked a trend of falling profits among Japanese car giants. The global ratings agency said it upped its credit rating on the firm, part-owned by France's Renault, by one notch to A3 with a stable outlook, its seventh-best ranking on scale of 19. "The upgrade reflects Moody's expectation that Nissan's new product cadence, its continuing focus on cost controls, and its commitment to building global brand value will enable (Nissan) to sustain the strong performance," in its latest fiscal year, Moody's said in statement. But the agency also warned over the strong yen and slowing growth in China, Nissan's biggest market. In May, Nissan posted a 341.43 billion yen ($4.28 billion) full-year net profit and record sales for the year to March, as the automaker shrugged off the devastating impact of last year's quake-tsunami disaster on production. Rivals Toyota and Honda saw profits plunge during the same period. Nissan's sales rose to their highest-ever 9.41 trillion yen with 4.85 million vehicles sold globally, even after a year that saw natural disasters and a high yen play havoc with many automakers' operations. The Japanese firm has said it plans to release 10 new products globally in the current fiscal year as it locks horns with global heavyweights General Motors and Volkswagen. But Moody's warned that weak demand for some of its new models, a strong yen, which makes exporters' products more expensive overseas, and slowing demand in China, now the world's biggest car market, may dent Nissan's growth prospects. "Further progress may be more difficult to achieve due to increasing market and competitive challenges," it said. "US and Japanese competitors are all aggressively pursuing their own expansion plans in China, an automotive market whose rapid pace of growth is likely to slow during 2012 and 2013."