Nissan has reported a big drop to operating profit this year as it has been hit by costs related to vehicle inspection issues in Japan and a Takata airbag recall class action in the US.
In the second quarter of the fiscal year (July through September) Nissan operating profit was down by 21.6% to 128.5 billion yen. Nissan took a 40.8 billion yen charge for inspection costs and the class action during the quarter.
Go deeper with GlobalData
In the first half, Nissan generated an operating profit of 281.8 billion yen (-17% on H1 FY2016) on net revenues of 5.65 trillion yen (up 6.2% on last year).
Nissan said that if special items are excluded, first-half operating profits reached 322.6 billion – in line with company expectations.
It also said that excluding special item costs, Q2 operating profits rose 9.2% to 169.3 billion yen amid rising unit sales in markets including Japan and China, where demand increased for models such as the Serena, Note e-POWER, X-Trail and Sylphy.
For the six-month period to September 30, 2017, Nissan’s global unit sales increased 4.6% to 2.73 million units. In Japan, Nissan’s sales rose by 34.1% to 283,000 units, equivalent to a market share of 11.4%, reflecting increased sales of both mini cars and registered passenger vehicles.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNissan’s unit sales in China, which reports figures on a calendar year basis, rose 6.7% to 651,000 units, equivalent to a market share of 5.2% amid strong demand for vehicles such as the X-Trail and Sylphy. In Europe, including Russia, Nissan’s sales rose 3.6% to 375,000 units, which resulted in a market share of 3.8%. Models including the Qashqai and Micra helped drive demand in the region.
However, Nissan sales in the US declined 0.4% to 779,000 units, compared with a 2.1% decline in the US market as a whole for the six-month period. In other markets, Nissan sales rose 2.3% to 390,000 units as strong growth in Latin America and Africa offset sluggish conditions in the Middle East, Asia and Oceania.
Outlook – full-year guidance is revised down
For the 12 months ending March 31, 2018, the company has revised its operating profit guidance downward by 40 billion yen to 645 billion yen to reflect the expected net impact related to vehicle final inspection issues in Japan, after taking account of other cost efficiency offsets.
As non-operating items and the effective tax rate are projected to improve versus the prior outlook, net income outlook remains unchanged. Nissan is also maintaining its previously-announced forecast for full-year net revenue.
In addition to first-half financial results, details of Nissan’s ongoing midterm plan “Nissan M.O.V.E. to 2022” were shared. The mission of the six-year plan is to achieve sustainable growth and to lead the technology and business evolution of the automotive industry.
By the the end of the plan Nissan aims to grow revenues from 12.8 trillion yen to 16.5 trillion yen, and generate a cumulative 2.5 trillion yen of automotive free cash flow, with an 8% operating margin.
Nissan arch-rival Toyota yesterday upped its forecast for company profits this year.
