[TOKYO] Nissan Motor said it will post a net loss of as much as 750 billion yen (S$6.9 billion) for the fiscal year that ended in March as restructuring charges weigh on the struggling Japanese carmaker that’s seeking a turnaround.
With an ageing lineup, Nissan has been discounting its cars in order to avoid building up inventory, eroding profits. Analysts were projecting, on average, a loss of 112 billion yen, which itself was worse than Nissan’s prior outlook for a deficit of 80 billion yen.
The even weaker-than-expected results will put increasing pressure on Nissan to find another lifeline after talks for a tie-up with Honda formally ended earlier this year. That led to the ouster of chief executive officer Makoto Uchida, who warned at the time that it would be “difficult to survive” without a partnership of some sort.
While Nissan slightly raised its sales forecast late Thursday, its statement warned that its net loss could be 700 billion to 750 billion yen. “This is primarily due to changes in the competitive environment and deterioration in sales performance,” it said. That would be Nissan’s biggest-ever loss on a annual basis.
Nissan is “finally admitting the inevitable, so that’s a good thing,” Bloomberg Intelligence analyst Tatsuo Yoshida said. “The market was already expecting a bigger loss.” He added that while the Japanese automaker is tallying up its losses to make a fresh start, that “doesn’t necessarily mean the future is bright.”
The carmaker’s sales are faltering in the US and China while it faces US$5.6 billion in debt obligations next year. Nissan does not have any hybrids to offer customers in key markets and has been embroiled in management turmoil and infighting since former chairman Carlos Ghosn was arrested and ousted in 2018.
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Last month, Uchida stepped down to take responsibility for Nissan’s deteriorating fortunes and was replaced by Ivan Espinosa, 46, who previously had held the title of chief planning officer for a year.
Espinosa faces the unenviable task of reversing Nissan’s fading fortunes, refreshing its outdated lineup and finding a new business partner. He will also have to navigate the upheaval caused by US President Donald Trump’s sweeping 25 per cent tariffs on US car and parts imports.
Shares of Nissan have taken a beating this year and are down 31 per cent, on top of a 13 per cent decline in 2024.
Operating income is now expected to be 85 billion yen instead of a prior forecast for 120 billion yen, issued Feb 13, Nissan said on Thursday (Apr 24). Net sales are likely to come in at 12.6 trillion yen instead of 12.5 trillion yen, the company said. BLOOMBERG
