Nis­san cuts op­er­at­ing profit fore­cast af­ter Japan re­call

The Malta Business Weekly - - FRONT PAGE -

Japan's Nis­san has re­duced its ful­lyear profit fore­cast as a safety in­spec­tion scan­dal hit earn­ings.

The car­maker ex­pects op­er­at­ing profit of 645bn yen ($5.7bn) for the year to March 2018, down from pre­vi­ous guid­ance of 685bn yen.

It also saw a sharp drop in op­er­at­ing profit for the three months to Septem­ber owing to weak­ness in the US.

It re­called 1.2 mil­lion cars in the do­mes­tic mar­ket last month af­ter flaws in safety checks were dis­cov­ered.

At a me­dia brief­ing in Yoko­hama yes­ter­day, Nis­san chief ex­ec­u­tive Hiroto Saikawa gave a long bow of apol­ogy and vowed to "re­gain the trust" in the wake of the scan­dal.

"I would like to ex­press my apolo­gies to cus­tomers, busi­ness part­ners, deal­ers and all the peo­ple who have been sup­port­ing Nis­san," he said.

Japan's sec­ond-largest car­maker sus­pended lo­cal pro­duc­tion for about three weeks af­ter it re­vealed un­cer­ti­fied work­ers car­ried out fi­nal ve­hi­cle in­spec­tion checks for decades. On Wed­nes­day, it re­sumed pro­duc­tion at all six of its do­mes­tic as­sem­bly plants.

The saga is the lat­est in a string of mis­con­duct cases in­volv­ing Ja­panese man­u­fac­tur­ers, in­clud­ing a data fal­si­fi­ca­tion scan­dal at Kobe Steel. Last year, Mit­subishi Mo­tors ad­mit­ted that it had fal­si­fied fuel ef­fi­ciency tests on some mod­els.

While costs re­lated to safety scan­dal are ex­pected to hit Nis­san's an­nual profit, other head­winds weighed on its quar­terly earn­ings.

Op­er­at­ing profit fell to 128.5bn yen for the three months to Septem­ber, down from 163.9bn a year ear­lier.

The re­sult, which missed mar­ket ex­pec­ta­tions, came as sales fell 2.2% in the in­creas­ingly com­pet­i­tive US mar­ket. On Tues­day, Toy­ota, Japan's largest car­maker, said its sales in North Amer­ica hit their low­est level in nearly three years.

But Nis­san fared bet­ter closer to home. Sales rose 8% in China, the world's big­gest car mar­ket, and jumped 25.6% in Japan over the quar­ter.

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