Nissan cuts annual sales forecast as first-half loss narrows
Higher interest expenses kept Nissan in the red despite an operating profit, while its full-year net profit forecast remained at 20 billion yen.
- Nissan has cut its annual global sales forecast to approximately 3 million vehicles, down from 3.15 million, primarily due to a 15% drop in sales in China.
- The company's net loss for the first half of the year (April-September) narrowed significantly to 39.7 billion yen, compared to 221.9 billion yen in the same period last year.
- Despite the net loss, Nissan returned to an operating profit for the six-month period for the first time in two years, driven by cost savings.
- Nissan is maintaining its full-year net profit forecast of 20 billion yen, even with the reduced sales projection.
Cost savings brought Nissan Motor Co. back to an operating profit in April–September, yet higher interest expenses left it with a consolidated net loss of 39.7 billion yen.
The carmaker presented its results on Wednesday (November 11), retaining a 20 billion yen net profit forecast for the financial year ending next March.
Its worldwide vehicle sales projection, however, was reduced to between 2.97 million and 3 million from 3.15 million because of sluggish sales in China.
China accounted for the setback in first-half vehicle sales: a 15% fall there exceeded the gains made in North America and Japan.
Nissan's global total consequently dropped to 1.41 million vehicles, 4.7% below the previous year's level.
“In the United States and Japan, renewed products and sharper retail execution are building momentum,” Nissan president and chief executive Ivan Espinosa told a press conference.
Nissan is looking to a wider model range to revive sales momentum in China.
It also plans to announce a new business plan next February.
The latest net loss was well below the 221.9 billion yen recorded a year earlier, although it meant Nissan had remained loss-making for two consecutive April–September periods.
Revenue reached 6,071.9 billion yen, an increase of 8.8%. From an operating deficit of 27.6 billion yen a year earlier, Nissan moved to an 80 billion yen operating profit, its first for the six-month period in two years.
Higher interest rates increased its interest expenses, preventing the operating recovery from delivering a net profit.
Toyota Motor Corp. and Honda Motor Co. also experienced steep declines in vehicle sales in China.
Japanese carmakers faced strong competition from Chinese manufacturers, while high fuel prices encouraged a rapid switch to electric vehicles.
Robust sales of hybrids in the United States accompanied strong vehicle sales in Japan.
A weaker yen and a lower US tariff burden also helped improve the manufacturers' earnings.
Financial reports issued by Wednesday showed that revenue had risen at every one of Japan's seven major carmakers.
Four recorded double-digit increases in April–September net profit: Toyota, Honda, Suzuki Motor Corp. and Subaru Corp.
The results also included a smaller net loss at Mitsubishi Motors Corp. and Mazda Motor Corp.'s first net profit for the period in two years.
All seven companies are preparing for the full impact of higher costs to begin feeding through to earnings in the second half of the financial year.
Shinsuke Toda, Subaru's managing executive officer, described the broad effects of rising raw material costs.
Alongside petroleum-related products, he identified steel, aluminium, semiconductors and labour costs at parts manufacturers as areas affected.
Weak sales in China and rising material costs linked to worsening tensions in the Middle East leave the industry's outlook highly uncertain.
[Copyright The Jiji Press, Ltd.]
