Nissan's Credit Downgraded to Junk Amid Restructuring Challenges

Nissan Motor Co. has been downgraded to junk status by Moody's due to weak profitability, an aging vehicle lineup, and ongoing restructuring challenges. The downgrade follows the collapse of merger talks with Honda and comes at a time when Nissan is under pressure to cut 9,000 jobs and reduce production by 20%. Analysts highlight that the company needs to sell 2.5 million cars annually to maintain profitability but is struggling to compete in key markets, particularly against rivals like Honda and Toyota. Despite these difficulties, shares surged over 5.5% on recent trading as some investors hold out hope for a turnaround or renewed merger discussions with Honda. However, any potential negotiations may hinge on significant concessions, including the departure of Nissan's CEO. Overall, Nissan faces a precarious future amid a highly competitive automotive landscape and deteriorating financial health.