Reports are circulating that Japanese automaker Toyota’s credit rating could get downgraded by Moody’s due to the earthquake that has left it unable to fully operate since March. However, this not-so-great news was balanced by the announcement on Wednesday that it had sold its 1 millionth Prius hybrid in the United States.
Moody’s Could Give Lower Credit Rating
Those looking to invest in Toyota may want to wait for Moody’s to make its decision on the company’s credit rating.
According to a new report from Bloomberg, Toyota Motor Corp.’s long-term credit rating could be cut by Moody’s Investors Service after the earthquake disrupted parts supply and stalled production in factories.
Moody’s said in a statement that damage to the plants and the disrupted shipping of about 500 types of components could lower its current rating of Aa2, which is the third-highest investment grade. It is in the process of reviewing the company’s status to decide whether this rating will change.
Toyota Sells 1 Millionth Prius Hybrid in the U.S.
While Toyota is struggling to piece itself back together in Japan, its sales are doing well enough in the United States to sell its one millionth Prius hybrid. The automaker announced on Wednesday that the Prius has been the top-selling hybrid in the U.S. since it went on sale 11 years ago.
The Prius, which is powered by both gasoline and an electric motor, can get up to 51 miles per gallon in the city and 48 on the highway. Experts say it has become a popular vehicle option, especially as gas prices move toward $4 per gallon.
Despite numerous recalls in 2010 and one recall early this year, Toyota vehicles have remained among the most popular on the road.
But since auto production is unlikely to restart anytime soon and auto prices are expected to increase as a result, the company is facing the possibility of losing its high investment rating and worse, its loyal customer base.
