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Tuesday May 13, 4:10 PM
Nissan Motor warns it expects steep profit drop this yearJapan's Nissan Motor Co. said Tuesday it expects net profit to tumble 29.5 percent this year due to sluggish sales in maturing markets, a stronger yen and high material costs. Japan's number three automaker reported annual net earnings of 482.26 billion yen (4.7 billion dollars), up 4.7 percent from the previous fiscal year, when its profits fell for the first time under onetime saviour Carlos Ghosn.
Ghosn hailed the results as a strong performance in what he said was "a challenging and volatile environment." The automaker sold 3.77 million vehicles, an increase of 8.2 percent from the previous year, despite a decline in the Japanese, US and European markets. For the current fiscal year, Nissan predicted a smaller net profit of 340 billion yen and an operating profit of 550 billion, down 30.5 percent from the previous year, on revenue of 10.35 trillion. "It is going to be a tough year for the whole industry. Every single element of our environment is negative," said Ghosn, who also heads the automaker's French partner Renault. "We are approaching this environment with a clean balance sheet (and) a pipeline full of products. We are very confident about Nissan's performance but we have to be realistic," he said. Nissan announced plans to introduce an all-electric vehicle in the United States and Japan in 2010. It also set a target of five percent annual revenue growth on average over the next five years, supported by the planned launch of 60 all-new models.
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