Breaking News

Nissan Warns of Sharp Drop in Profit as Sales Fall in Major Markets

Category: Business,Finance

YOKOHAMA, Japan — Nissan warned on Tuesday that sales continued to drop in major markets and forecast a sharp drop in operating profit, another blow for the automaker as it tries to shore up its management team after the arrest of its former chairman Carlos Ghosn.

The company expects its operating profit will drop by nearly 28 percent to 230 billion yen ($2 billion) for the fiscal year ending in March 2020. It blamed diminishing sales in the United States and Europe.

“We hope to hit the rock bottom in 2018 and 2019 and reverse the trend in the coming years,” the company’s chief executive, Hiroto Saikawa, told reporters.

Nissan said it expected to sell more cars globally as a result of expansion in the Chinese market.

Nissan and Renault continue to debate how best to manage their alliance, which accounted for 10.7 million car sales in 2018, and has been struggling since Mr. Ghosn was charged with financial wrongdoing last year in Japan.

Mr. Saikawa had been critical of some Nissan efforts to expand in the United States and, specifically, of sales targets pushed by Mr. Ghosn. Beginning in 2011, Mr. Ghosn had wanted Nissan to reach 8 percent profit margins and 8 percent market share in the countries where it operated.

Halfway through the plan, dealers complained that they were losing money on Nissan’s incentives to buyers and that Nissan was selling too many vehicles to rental companies, flooding the secondary buyers’ market.

Nissan also reported that its operating profit had dropped by nearly 45 percent to 318 billion yen ($2.9 billion) in 2018. Costs related to extended warranties on vehicles sold in America dealt another powerful blow, the company said at a news conference at its headquarters in Yokohama, Japan.


Source link

No comments