Fitch revises Nissan’s outlook to negative

Fitch Ratings revised on Tuesday the outlook on Nissan Motor Co., Ltd. to negative from stable, reflecting the company’s weaker-than-expected performance in North America.

The rating agency affirmed Nissan’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) and senior unsecured rating at ‘BBB-‘ and its Short-Term Foreign- and Local-Currency IDRs at ‘F3’.

Fitch forecasts that Nissan’s auto EBITDA margin will decline to 2.6 per cent in the fiscal year ending March 2025 and 4.4 per cent in the following year, compared to 5.6 per cent in the current fiscal year.

The agency attributes this decline to high inventory levels and challenging pricing conditions in the North American market, as per its report.

If Nissan’s weak performance persists or worsens, Fitch may downgrade the company’s ratings. However, if a recovery appears more likely, the agency may affirm the ratings.

Despite the negative outlook, Fitch acknowledges Nissan’s strong business profile, which is characterised by its large scale, diversification, and presence in multiple end-markets and segments.

Attribution: Fitch Ratings report

Subediting: M. S. Salama