NEW YORK -- Fitch Ratings on Tuesday changed the debt rating outlook of DaimlerChrysler to stable from positive, citing the performance of the Mercedes Car Group, making an upgrade in the short term unlikely.
The agency also cited competitive pressures in the auto industry.
While the Mercedes Group has helped stabilize the automaker's credit profile, it has faced restructuring, increasing operating losses and higher expenses, Fitch said.
The group's performance will be a key focus of the ratings agency. It has faced quality issues and exchange rate risk related to a weak U.S. dollar, Fitch said.
An outlook revision to stable indicates the debt ratings are less likely to be upgraded over the next one to two years.
Despite improved market share and profits in the Chrysler Group, profitability may be affected in the intermediate term by new product competition and pricing pressures, Fitch said.
Fitch rates DaimlerChrysler's senior unsecured debt "BBB-plus" and affirmed the company's short-term "F2" rating.