Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Nissan slashes profit outlook after sales slide, says more restructuring needed

Stock MarketsFeb 13, 2020 06:34AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Nissan Motor's CEO Makoto Uchida speaks at a news conference in Yokohama

By Naomi Tajitsu

YOKOHAMA (Reuters) - Nissan Motor Co (T:7201) on Thursday cut its annual operating profit forecast by 43%, hit by a slump in vehicle sales and heaping more pressure on new management to fix a company still reeling from the scandal surrounding former leader Carlos Ghosn.

Nissan's sharply waning earnings power has already prompted plans to slash jobs, close manufacturing sites and drop product offerings, sources have said, as the automaker steps back from an aggressive pursuit of market share championed by Ghosn.

The dismal outlook comes after Japan's No. 2 automaker posted its first quarterly net loss in nearly a decade, and contrasts with upbeat forecasts from rivals Toyota Motor Corp (T:7203) and Honda Motor Co (T:7267).

"We are making progress, but sales volumes have been weak so we need to do more restructuring than initially planned," Makoto Uchida, Nissan's new CEO and its third since September, told reporters.

He did not elaborate on what steps might be taken but added that the company's financial position would continue to be tough in the next business year as it would take time to repair profitability in the United States, its No. 2 market.

Nissan now expects operating income of 85 billion yen ($775 million) for the year to March, far less than an average forecast for 134.5 billion yen from 20 analysts polled by Refinitiv.

It also said it would not pay a dividend for the second half and that its annual dividend would be 10 yen per share, a steep drop from the 57 yen paid a year earlier.


The automaker, which has suspended operations in China due to the coronavirus epidemic, said it would restart output at three vehicle plants on Feb. 17. Two plants, including one in Hubei Province, the epicentre of the outbreak, will remain shut until at least Feb. 20.

The outbreak has also caused Nissan to reduce production at three domestic vehicle factories throughout February due to a lack of parts and logistics issues.

Nissan's global vehicle sales tumbled 11% during the quarter, its brand image hurt badly by years of heavy discounting in the United States and other countries.

Sales dropped 18% in the United States, with once popular models like its Rogue SUV crossover and its Sentra sedan falling out of favour. In China, the world's biggest auto market, sales slipped 0.6%.

It now expects to sell 5.05 million vehicles for the entire year, which would be its weakest sales performance since 2013.

During the October-December third quarter, operating profit tumbled 78% and it booked a net loss of 26.1 billion yen.

For an interactive chart on Nissan's vehicle sales and operating profit, click on

Sources have said Nissan is set to eliminate at least 4,300 white-collar jobs and shut two manufacturing sites as part of broader plans to add at least 480 billion yen to its bottom line by 2023.

The moves, an expansion of a plan unveiled in July, will also include fewer car models, options and trims on offer, while marketing budgets as well as jobs at head offices in the United States and Europe will be slashed, the sources said.

Ghosn, who was also head of alliance partner Renault (PA:RENA), was arrested in Japan in November 2018, accused of understating his salary and using company funds for personal purposes. He has denied any wrongdoing, and staged a dramatic escape to Lebanon in December while awaiting trial.

Nissan on Wednesday said it had filed a civil lawsuit in Japan against Ghosn, seeking 10 billion yen in damages over his alleged misconduct.

Nissan slashes profit outlook after sales slide, says more restructuring needed

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email