Nissan doubled its full-year net income forecast on Tuesday, anticipating challenges such as chip damage and rising commodity prices as the company returns to strong quarterly performance amid the impact of the epidemic.
The Japanese auto giant has faced numerous lawsuits in recent years, ranging from low demand to the arrest of former boss Carlos Gon, and its annual profits remained in 2018-19 for the last time.
But despite lower-than-expected sales this fiscal year, largely due to a shortage of microchips, “sales quality has continued to improve in every market, resulting in higher unit profits,” Nissan said.
The troubled company now expects a net profit of $180 billion through March 2022.
However, it increased its annual sales forecast from JPY 9.75 trillion (approximately 6.39.150 billion rupees) to 8.8 trillion JPY (approximately 5.76873 billion rupees).
“The shortage of semiconductors is a challenge for the auto industry,” CEO Ashwani Gupta told reporters.
But “we hope our sales efforts … these challenges outweigh the decline in sales.”
Shortages of semiconductors, a key component of modern cars, are hampering global car production, while supply chain problems in epidemic-hit Southeast Asia have exacerbated automakers’ problems.
“This crisis taught us resilience and agility. Don’t expect this crisis to end and a new crisis to come. Something new is about to happen,” added Gupta.
Nissan reported a net profit of JPY 54.1 billion (approximately 2546 rupees) for the three months ended September, compared with a net loss of JPY 44.4 billion (approx.
“Our strong results are the result of careful financial management, improved sales quality and constant product competitiveness. This has helped us overcome many challenges,” said CEO Makoto Uchida.
On the road to recovery, analysts say Nissan has a good chance of achieving its goals despite the challenges.
“Nissan is on a recovery path,” said Satoru Takda, an automotive analyst at research and consulting firm TIW based in Tokyo.
“Black is likely to come back, and whatever Nissan does after two years of net losses, it has to be achieved,” Takada told AFP before announcing the gains.
“But the headwind is strong with production cuts,” he added.
Renault, Nissan’s French partner, said last month that a global shortage of electronic components, particularly semiconductors, was expected to result in about 500,000 fewer vehicles than expected this year.
Last week, rival automaker Honda reported a decline in net profit for the second quarter, while a chip shortage also raised its annual revenue forecast.
But Toyota, the world’s best-selling automaker, increased its full-year revenue forecast after a strong quarter due to deteriorating weather conditions.
Even before the Covid crisis, Nissan was struggling with rising sales costs and the ongoing story of its former boss Gon.
The former auto tycoon was arrested in Japan in 2018 on charges of financial misconduct, which he denies but jumped on bail and fled to Lebanon the following year.
He is a fugitive, but his former partner Greg Kelly and Nissan himself are on trial in Japan.
Last month, Kelly told the court he was “not guilty of any crime” and that prosecutors had sentenced him to two years in prison.