Scandal-hit Nissan slashes annual operating profit forecast

TOKYO: Japanese car giant Nissan yesterday downgraded its annual operating profit forecast after a damaging inspection scandal in its domestic market, as its CEO vowed to regain customers’ trust.

Nissan said it now expects to make an operating profit of 645 billion yen ( US$ 5.7 billion) for the year to March, a cut from its previous forecast of 685 billion yen.

The manufacturer left its forecasts for net profit and sales unchanged at 535 billion yen and 11.8 trillion yen respectively. Before presenting the figures to journalists, Nissan chief executive Hiroto Saikawa bowed long and deep in apology.

“I would like to express my apologies to customers, partners, dealers and all the people who have been supporting Nissan,” said Saikawa.

The scandal has “undermined the trust of all of you”, he said, adding: “We would like to do our best to regain the trust of all of you.” Last month Nissan said it was recalling some 1.2 million cars in Japan that had failed to meet domestic rules on final vehicle inspections.

The company confirmed that tests were performed by staff who were not certified to check the vehicles to Japanese government standards.

The automaker suspended all domestic production for a few weeks before resuming earlier this week, sending its passenger car sales plummeting more than 55 per cent in Japan in October.

“Considering the impact from the inspection issue-related costs in Japan and the pace of progress in our cost- cutting efforts, we are revising down our operating profit forecast,” the maker of the Altima sedan said in a statement.

Excluding the impact from the inspection scandal in Japan and costs linked to litigation in the US, Nissan said its operating profit was “in line with our initial forecast”. For April- September, Nissan’s net profit edged down 2.1 per cent year- on-year to 276.51 billion yen while operating profit dropped 17.0 per cent to 281.83 billion yen. — AFP