Tokyo (AFP) – Japanese automaker Nissan said on Thursday it expected to suffer a net loss of 650 billion yen ($4.2 billion) in its fiscal year that ends in March, as it struggles with sluggish sales. The huge loss is twice as much as analysts surveyed by Bloomberg had predicted. The company, however, sharply lowered the forecast for its annual operating loss to 60 billion yen, citing the acceleration of its restructuring measures. That is far less than the operating loss of 275 billion yen it had predicted at the end of October. It is still projecting a 5.8 percent decline in revenue for the year, to 11.9 trillion yen.
The group is facing intense pressure on its sales and has had to contend with a massive hike in US tariffs. Nissan has also faced numerous other speed bumps in recent years, including the 2018 arrest of former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box. A merger with Japanese rival Honda had been seen as a potential lifeline, but talks collapsed last year when the company proposed making Nissan a subsidiary. Of Japan’s major automakers, Nissan was seen by analysts as likely to be the most severely hit by US President Donald Trump’s tariffs.
Trade officials reached a deal in July that saw the United States lower tariffs on Japanese goods to 15 percent from a threatened 25 percent. Japanese cars were taxed at an even higher rate of 27.5 percent, and the reduction to 15 percent did not take effect until mid-September. Nissan intends to reduce the number of its vehicle production plants from 17 to 10 by March 2028 and is targeting 20,000 job cuts worldwide by that date.
On Thursday it reported “steady progress through outsourcing, efficient use of marketing funds, leveraging shared services and expense management” and said its “workforce resizing initiatives (were) advancing responsibly”. Despite this, the group said sales results in the third quarter, between October and December, were “challenging in a difficult market environment.” Revenue fell five percent year-on-year to 2.999 trillion yen, and it posted another net loss of 28.3 billion yen, though that was less severe than expected. Nissan saw sales in the US drop another 3.7 percent year-on-year in the third quarter, although in China they were up by 12.7 percent thanks to new electric vehicle models.
© 2024 AFP
