DETROIT -- Toyota Motor Corp. and its parts-making subsidiary Denso Corp. received votes of confidence today from Standard & Poor’s, which affirmed the makers’ ratings. This comes at a time when many auto makers and suppliers have been downgraded.

The affirmation of Toyota’s AAA/Negative/A-1+ rating and Denso’s AA+/Stable/A-1+ rating reflects the Japanese companies’ solid credit quality as well as the geographic diversity of their revenue sources, offshore operations and limited dependency on imports, says the credit rating agency.

Perhaps more importantly, Toyota and its main supplier are not believed to be heading in the same direction of their faltering homeland. Standard and Poor’s also today lowered its sovereign rating on the nation of Japan, to AA with a continued negative outlook.

The operations of the globally competitive companies are well insulated from the risks in Japan, mired in a prolonged recession. Toyota and Denso through conservative and well balanced financial profiles also are protected from the hazards of exchange-rate swings or market disruptions either in Japan or elsewhere, says Standard and Poor’s.

Car sales in Japan are flat on-year, after several years of steady declines. And the less-expensive compact B-segment is showing the strongest growth. Toyota sales are up 0.9% over last year from January-September, but Toyota small-car subsidiary Daihatsu Motor Co. Ltd. saw passenger car sales, excluding minivehicles, up 61.1% over like-2000. Daihatsu’s minivehicle sales are flat in a down market.

With a 40% market share, Toyota is dominant in Japan. But the No.3 global auto maker does about one-third of its global sales and revenue in North America, says Toshiaki (Tag) Taguchi, president and chief executive of Toyota Motor North America Inc.

As in Japan, the auto maker is weathering the U.S. recession with strong sales and little financial hardship, Toyota officials say. The auto maker announces it will be extending 0% financing through Jan. 2 on the Corolla compact car, Tundra fullsize pickup and 4Runner SUV. The auto maker originally planned to discontinue incentives at the end of November but now says such incentives are needed to compete with other car makers, which extended 0% into January.

These incentives -- which do not apply to the automaker’s strongest vehicles -- are having little financial impact on Toyota , which more or less replaced existing dealer incentives, says James E. Press, Toyota Motor Sales U.S.A. Inc.’s chief operating officer. Plus, the Corolla, which gets a full revamp in the coming year, probably would have been cleared out through heavy incentives anyway, Press adds.

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