Japanese automaker Nissan Motor Co forecasted its largest-ever annual operating loss on Tuesday and declared that it expected a 16 percent decline in its vehicle sales as the COVID-19 pandemic continues to impede the country's efforts to enable businesses to bounce back.
The No.2 carmaker in Japan forecasted an operating loss of 470 billion yen ($4.5 billion), which is much higher than a consensus estimate by Refinitiv that predicted a loss of 262.8 billion yen and its second continuous year of making losses. It also predicted the fall of revenues to 7.8 trillion yen.
Effects of Carlos Ghosn Fiasco
Years of aggressive expansion, particularly in emerging markets, have left Nissan with dismal margins, an aging portfolio, and a tarnished brand. Still reeling from the 2018 arrest and ouster of former CEO Carlos Ghosn, it unveiled a far-reaching restructuring plan in May that calls for a dramatic reduction in production lines and its vehicle model range.
In the first quarter, Nissan posted an operating loss of 153.9 billion yen, its second consecutive quarterly loss after falling 94.8 billion yen into the red in January-March. "The results for the first-quarter and the full-year outlook look challenging, but are within our expectations," Chief Executive Makoto Uchida told a live-streamed media briefing while noting the company was facing a "tough year".
Falling Global Sales
Global vehicle sales tumbled 48 percent to 643,000 units in the April-June quarter as sales halved in North America, a key market. Sales in China fell by 40 percent. Nissan's woes have highlighted the fragility of its automaking partnership with France's Renault SA which has also announced a major restructuring as it rows back on policies pursued by Ghosn, now a fugitive wanted on charges of financial misconduct in Tokyo.
Ghosn denies the charges. Mitsubishi Motors Corp, a junior partner in the three-way alliance, saw its shares tumble some 13 on Tuesday after sales in Southeast Asia plunged 70 percent during the April-June quarter.
(With inputs from agencies)