Nissan profit down 15 percent, hurt by strong yen
Thursday, July 26, 2012
TOKYO (AP) — Nissan said Thursday its quarterly profit fell 15 percent from a year earlier as the strong yen bit into car sales.
The Yokohama-based company reported a 72.3 billion yen ($900 million) profit, down from 85 billion yen a year earlier. Worldwide sales rose 2.6 percent.
Company chairman Carlos Ghosn said Nissan had triumphed in growing sales despite the “harsh economic environment” thanks to its strong model lineup, which includes the Leaf electric car.
Japanese automakers have been hammered by the strong yen which erodes profit from cars produced in Japan and then shipped overseas.
Nissan Motor Co. has remained upbeat, however, earlier raising its forecast for the fiscal year through March 2013 to a 400 billion yen ($5 billion) profit, up from its earlier forecast for 290 billion yen ($3.6 billion) profit.
The company is gearing up for stronger growth despite the slowdown in Europe, counting on solid demand in emerging markets such as China. Ghosn has said Nissan aims to be the No. 1 Asian brand in China, Russia and India.
Nissan made a remarkably quick recovery from the March 2011 earthquake and tsunami disasters that ravaged much of northeastern Japan and disrupted auto production, selling a record 4.85 million vehicles worldwide in 2011. It expects to sell 5.35 million this year.
Reflecting that strong rebound, its January-March profit had more than doubled to 75.3 billion yen ($941 million). The company’s performance in the most recent quarter reflects a “return to normal,” it said.
To counter the unfavorable exchange rate, Japanese car makers are increasingly shifting production abroad, making countries such as Thailand important auto production bases.
Last week, the French-Japanese auto alliance of Renault and Nissan announced it is investing $160 million in its South Korean unit to produce Nissan-branded Rogue sport-utility vehicles mostly destined for the United States.
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