TOKYO -- Moody's cut its rating on Nissan Motor Co. by one notch on Friday, citing weak U.S. sales and casting a shadow on the Japanese automaker's move to improve its business following a decline in its annual profit.
Nissan -- hit by former Chairman Carlos Ghosn's arrest last year and troubles at its North American business -- reported a 45 percent plunge in annual operating profit in the year ending March, and forecast a 28 percent drop in profit this fiscal year.
Moody's cut its rating of Nissan's credit to "A3" from "A2," adding that the outlook was negative.
"The downgrade reflects the continuing slide in Nissan's profitability, driven by weak sales in the U.S., its largest market," Moody's Vice President Motoki Yanase said in a statement.
Nissan's U.S. sales fell 8.4 percent to 461,549 vehicles through April in an overall market that declined 3 percent, according to the Automotive News Data Center.
While Nissan's new strategy focuses on margin over unit sales growth and refreshing old models to improve its brand value, the ratings agency expects the overhaul will take "several years."
"The negative outlook on Nissan reflects execution risk as Nissan implements its business strategies globally, reforms its corporate governance and stabilizes its alliance with Renault," it said.
France's Renault SA is the top shareholder in Nissan.