S&P upgrades Mitsubishi

S&P said it raised the long-term corporate credit rating on Mitsubishi Motors Corp. one notch to BB from BB-.

The outlook is positive.

The agency also said it based the upgrade on a view that Mitsubishi Motors has progressed improvement in its internal controls over the past year as part of ongoing restructuring of its organization and business operations since Nissan Motor Co. Ltd. became its largest shareholder in October 2016.

From May 2016, the agency said its rating on the company incorporated a two-notch downward adjustment to reflect a view that its internal controls had serious flaws in light of its April 2016 admission that it falsified fuel-economy data.

Mitsubishi Motors has improved its organizational structure and business operations since October 2016 when Nissan Motor took a 34% stake and became its largest shareholder, S&P explained.

The agency also said it believes its internal controls have improved somewhat over the past year given that its operating profit has recovered steadily.

The ratings also consider that the auto industry faces high risk of cyclicality and intense competition, S&P said.

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