Nissan Motor's operating profit plunged 98.5% in the first fiscal quarter ended 30 June, the automaker announced. It plans to cut 12,500 jobs worldwide, more than the 4,800, then 10,000 previously thought.
Operating profit of JPY1.6bn compared with JPY109.1bn on net revenues of JPY2.37 trillion (JPY2.716 trillion).
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Operating margin of 0.1% compared with 4% a year ago.
First quarter net income fell 94.5% to JPY6.4bn.
"Global total industry volume remained weak during the quarter and Nissan's unit sales decreased as the company continued its efforts to normalise sales," the automaker said in a statement.
"Profitability was negatively impacted by the decrease in revenues and external factors such as raw material costs, exchange rate fluctuations and investments to meet regulatory standards."
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By GlobalDataFirst quarter global total industry volume fell 6.8% to 22.5m units while Nissan's unit sales fell 6% to 1.23m vehicles.
Its Japan sales fell 2.6% to 126,000 units. The new Dayz was well received when it went on sale in March with demand remaining very strong throughout the quarter, the automaker said. The minicar model is supplied on an OEM basis by Alliance partner Mitsubishi.
In China, where Nissan reports on a calendar year basis, unit sales increased 2.3% to 344,000 units, for a market share of 5.7%, a 0.7 percentage point increase from the prior year. This was driven by strong demand for models including the Sylphy sedan and Qashqai and X-Trail crossovers, as well as Venucia-brand models such as the T60 crossover.
In the US, Nissan's sales totalled 351,000 units, for a market share of 7.9%.
Nissan sales in Europe, including Russia, fell by 16.3% to 135,000 units. Market share in Europe was 2.5%. Unit sales in Russia decreased 21.7% to 18,000 units, equivalent to a market share of 4.1%.
In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan's sales decreased 13.1% to 174,000 units.
Nissan reiterated it was "implementing strategic reforms in order to build an operational base that will ensure consistent and sustainable profitability over the medium term".
The company said it was moving quickly to optimise cost structures and manufacturing operations.
Job cuts
It will reduce its global production capacity by 10% by the end of fiscal year 2022. In line with production optimisations, the automaker said it would "reduce headcount by roughly 12,500".
It will also shrink its product line by at least 10% by the end of fiscal year 2022 "in order to improve product competitiveness by focusing investment on global core models and strategic regional models".
While some of these initiatives are already under way, the company expects that substantial improvements in its performance will take time.
It will continue to invest in technology that will strengthen the product competitiveness. This includes the ProPILOT driver assistance system, as well as the launch of vehicles with electrified powertrains, including e-POWER models and battery-electric models, in new markets.
Nissan will continue to expand into new business areas such as the recently-announced exclusive agreement with Waymo to explore driverless mobility services in Japan and France, and public field tests of new mobility services with DeNA.
