JAPAN: Nissan profits plunge as more jobs go

By just-auto.com editorial team | 31 October 2008

Nissan Motor on Friday reported reduced first fiscal half profits, forecast reduced full-year sales and said   it would cut more jobs - this time salaried and temporary workers.

Net after-tax income for the six months to the end of September was down 40.5% year on year to JPY126.3bn (US $1.19bn, EUR 0.78bn) due primarily to the negative impact of foreign exchange rates, the severe decline in the US market, provisions for risk on leased vehicles in North America and "product mix deterioration", according to the automaker.

Net revenues fell 3.9% to 4.8693 trillion yen ($45.89bn, EUR29.91bn). Operating profit was down 47.8% to JPY191.6bn ($1.81bn, EUR1.18bn) and operating profit margin was 3.9%. Ordinary profit was down 43.7% to JPY202.7bn ($1.91bn, EUR1.25bn).

Nissan boosted fiscal half unit sales 4.7% to 1,902,000 vehicles worldwide. North America sales were down 0.9% to 666,000 units with US volume off 3.4% to 516,000 units though market share rose 0.9% to 7.2%.

Sales in Japan were down 4.3% to 318,000 units while European volume was up 0.7% to 306,000 units. Sales in 'general overseas markets' rose 20.6% to 612,000 units due to growth in China and the Middle East.

"The global financial and economic crisis has had a profound effect on every area of our industry, with the grip on credit and declining consumer confidence being the most damaging factors," said Nissan president and CEO Carlos Ghosn.

"Since we see no relief in the second half, we are taking all necessary and responsible measures to protect the company and preserve our ability to rebound when conditions improve."

Second fiscal quarter net income fell 38.8% to JPY73.5bn ($0.69bn, EUR 0.45bn), net revenues amounted fell 3.7% to 2.5221 trillion yen ($23.77bn, EUR15.49bn), operating profit was off 48.9% to JPY111.7bn ($1.05bn, EUR 0.69bn) and operating profit margin was 4.4%. Ordinary profit was down 42.5% to JPY120.2bn (1.13bn, EUR 0.74bn).

Vehicle sales were up 2.7% to 966,000 in the second quarter.

"The effects of the global financial and economic crisis have created conditions of extreme volatility and uncertainty that are expected to continue for the remainder of FY08," the automaker said.

"Despite the lack of reliable economic and industry forecasts and taking into consideration most factors affecting our activities, the company has revised its operating profit and its net income forecast for the full fiscal year 2008 to JPY270bn ($2.54bn, EUR1.66bn) and JPY160bn ($1.51bn, EUR 0.98bn), respectively."

The automaker now expects global vehicle sales to total about 3.77m units - essentially flat year on year and a revision down from its earlier projection from 3.9m units.

Nissan chief operating officer Toshiyuki Shiga said the shortfall was mainly due to weakness in the US market, according to Reuters.

The automaker also said on Friday it would cut 2,500 salaried jobs overseas and 1,000 temporary positions in Japan as it plans to reduce vehicle production this business year by 200,000 units in Europe, Japan and North America.

Nissan has been offering buyouts to workers at its US head office in Tennessee and also recently announced plans to axe around 1,850 assembly plant jobs in Spain.