Nis­san slashes full year fore­cast

Muscat Daily - - BUSINESS -

Yoko­hama, Ja­pan - Cri­sis-hit Ja­panese au­tomaker Nis­san on Tues­day slashed its full-year fore­cast for both sales and profit as it strug­gles with weak de­mand in Ja­pan, the US and Europe, as well as fall­out from the ar­rest of for­mer boss Car­los Ghosn.

Nis­san down­graded its net profit fore­cast to 110bn yen (US$1bn) for the fis­cal year to March 2020, com­pared with an ear­lier es­ti­mate of 170bn yen.

Full-year sales are now es­ti­mated at 10.6tn yen, down from a pre­vi­ous fore­cast of 11.3tn yen.

Nis­san blamed the poor out­look on weak first-half earn­ings, a strong yen, an un­cer­tain global out­look and the stag­na­tion of the car in­dus­try in gen­eral.

In­com­ing chief fi­nan­cial of­fi­cer, Stephen Ma said, “Sales in China out­paced the mar­ket but sales in other key re­gions in­clud­ing the US, Europe and Ja­pan un­der­per­formed in those mar­kets. This re­sulted in the over­all de­crease of our mar­ket share.”

Net profit for the six months to Septem­ber plunged 73.5 per cent to 65.4bn yen on sales down 9.6 per cent at 5.0tn yen.

It was its first earn­ings an­nounce­ment since Nis­san named Makoto Uchida as new chief ex­ec­u­tive last month, el­e­vat­ing the in­sider head­ing the firm’s China unit as it over­hauls its lead­er­ship after the Ghosn scan­dal.

The ap­point­ment, to take ef­fect on De­cem­ber 1, came after months of tur­moil for the au­tomaker in the wake of the ar­rest of for­mer chief Ghosn on al­le­ga­tions of fi­nan­cial mis­con­duct.

For­mer CEO Hiroto Saikawa re­signed in Septem­ber after an in­ves­ti­ga­tion prompted by the Ghosn scan­dal re­vealed he was among Nis­san ex­ec­u­tives who re­ceived ex­cess pay by al­ter­ing the terms of a share price bonus.

“Nis­san’s new man­age­ment is set­ting sail in a storm,” said Sa­toru Takada, auto an­a­lyst at TIW, a Tokyo-based re­search and con­sult­ing firm.

“Uchida is ex­pected to show new strate­gies for Nis­san’s sur­vival,” Takada told AFP.

The au­tomaker has cited a global slow­down in the auto sec­tor, but it is also suf­fer­ing from a lack of in­no­va­tion on its pro­duc­tion line and rep­u­ta­tional dam­age from the Ghosn scan­dal.

Uchida in­her­its the harsh cost-cut­ting mea­sures Saikawa pro­posed as a way out of the cri­sis - in­clud­ing re­duc­ing dealer in­cen­tives and pro­mo­tions but also cut­ting global pro­duc­tion by 10 per cent to 2023 - a mea­sure that means the loss of 12,500 jobs.

“Ad­di­tional re­struc­tur­ing is pos­si­ble in the wake of the lay­off plan,” Takada said.

Asked about pos­si­ble fresh job losses, Nis­san of­fi­cial Ma said no new an­nounce­ment would be made un­til the full new man­age­ment team is in place on De­cem­ber 1.

Adding to Nis­san’s woes is con­tin­ued ten­sion within the three-way al­liance with Mit­subishi Mo­tors and Re­nault.

Ghosn, who cre­ated the al­liance, wanted greater in­te­gra­tion with France’s Re­nault, and says his push for that prompted an­gry Nis­san ex­ec­u­tives to plot against him.

(Bloomberg)

Stephen Ma, in­com­ing chief fi­nan­cial of­fi­cer of Nis­san Mo­tor Co, speaks dur­ing a news con­fer­ence in Yoko­hama, Ja­pan on Tues­day

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