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Fitch: Weaker Yen, Cost Reductions to Buffer Japanese Autos Earnings

(The following statement was released by the rating agency) SINGAPORE/SEOUL, November 26 (Fitch) Fitch Ratings says in a Special Report released today that credit profiles of the Big Three Japanese automakers will remain stable in 2015. Profitability will be supported by the positive impact of a weakening yen and cost reductions, offsetting margin erosion from heightened competition in the US, China and Japan. Modest sales volume growth will come mainly from the US, a stabilising Europe, and a moderate-but-slowing China, which will offset a weak Japan and volatility in certain emerging markets. Toyota Motor Corporation's (A/Stable) profitability boost could be pronounced, if the yen remains at its current rate of JPY118/USD or weaker throughout 2015, as it has the highest proportion of domestically produced vehicles for export of the Big Three. Fitch forecasts positive free cash flow generation and continued robust liquidity for Toyota, Honda Motor Co., Ltd (A/Stable) and Nissan Motor Co., Ltd (BBB/Stable), from solid underlying earnings and moderate capex. The report, "2015 Outlook: Japanese Automotive Manufacturers", is available on www.fitchratings.com or by clicking on the link in this press release. Contact: Isabelle Katsumata Director +65 6796 7226 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Jeong Min Pak Senior Director +82 2 3278 8360 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: [email protected]; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: [email protected]. Additional information is available on www.fitchratings.com. Applicable Criteria and Related Research: 2015 Outlook: Japanese Automotive Manufacturers http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=813388 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.