Nissan Upbeat on Annual Profit Despite Challenges

Reuters

17:55 JST, May 9, 2024

TOKYO (Reuters) – Japan’s Nissan Motor 7201.T expects to beat analyst estimates with a 5.5% rise in operating profit this fiscal year on higher global sales, it said on Thursday, while warning that intense competition and challenges from inflation would continue.

The Yokohama-based automaker expects only a small rise in vehicle sales in China, highlighting the difficulties it faces in the world’s top auto market, while counting on strong growth in North America to lift its performance.

Nissan sees operating profit coming in at 600 billion yen ($3.85 billion) in the year that started on April 1, compared with the 577.3 billion yen average estimate from 18 analysts surveyed by LSEG.

It also expects foreign exchange moves to boost its annual results, helping to offset inflationary pressures.

Operating profit for the three months ended March 31 came to 90.3 billion yen, far short of the average estimate of 118.2 billion yen from eight analysts surveyed by LSEG.

Nissan forecast global retail sales this financial year at 3.7 million vehicles, up 7.5% from the 3.4 million sold last fiscal year.

The forecast includes an expected 13.3% rise in North American sales to 1.4 million vehicles.

In China, Nissan sees an increase of just 0.8%, after sales slumped 24% last financial year to just below 800,000.

Japanese car brands such as Nissan and Honda Motor 7267.T have lost market share in China to fast-moving local rivals that have attracted drivers with an array of cheap, software-loaded electric vehicles.

At last month’s Beijing auto show, Nissan showed off four concept models for the Chinese market and unveiled a memorandum of understanding with Baidu 9888.HK to conduct research on artificial intelligence and so-called “smart cars.”

Nissan also said it would invest in Kasai, a manufacturer of car interior products such as trim parts by acquiring 6 billion yen of newly issued shares, pending regulatory approvals.

In April, Nissan slashed its annual operating profit estimate for the year that just ended by 14.5% on lower-than-expected vehicle sales.

$1 = 155.8000 yen