World Business
Nissan slashes quarterly loss to $125 million
(Agencies)
Updated: 2010-05-12 16:53
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TOKYO – Nissan's losses for the January-March quarter shrank dramatically as Japan's No 3 automaker benefited from a global auto recovery and booming car sales in China.
Nissan Motor Co said Wednesday its quarterly loss was 11.6 billion yen ($125 million) — a fraction of the 276.9 billion yen loss recorded a year earlier, crediting cost cuts and sales growth in emerging markets.
The Yokohama-based maker of the March subcompact, Leaf electric car and Infiniti luxury models said the results were better than expected, and promised to achieve a complete recovery in the current fiscal year ending March 2011.
Nissan — allied with Renault SA of France, which owns 44 percent of the Japanese automaker — posted a profit of 42.4 billion yen for the full year and expects profit to more than triple to 150 billion yen ($1.6 billion) in the year through March 2011.
"Though we are still operating in crisis mode, Nissan is well on track toward complete recovery without any compromise to our strategic priorities," said Nissan President and Chief Executive Carlos Ghosn, who also heads Renault.
Nissan is expecting annual revenue to recover to 8.2 trillion ($88.5 billion).
The automaker had a loss of 233.7 billion yen in the year through March 2009 as car sales plunged amid the global financial crisis.
Ghosn said Nissan's 11-year alliance with Renault, which allows the automakers to share auto parts and technology, will be key to keeping the recovery going.
Also to its advantage is a new partnership announced last month with German automaker Daimler AG, he said.
Ghosn said details weren't ready to be announced on how the tie-up with Daimler will play out in shared technology for electric vehicles and other green technology.
The three-way tie-up among Renault, Nissan and Daimler gives each company a 3.1 percent stake in the others, and they have already said they will share engines and other auto parts to bolster model offerings in small cars.
Nissan is banking on the success of the Leaf zero-emission car, on sales in the US, Japan and Europe, and has been less bullish on gas-electric hybrids compared to Japanese rivals Toyota Motor Corp with its Prius and Honda Motor Co, which makes the Insight.
Nissan is boosting research and development spending from 386 billion yen ($4.2 billion) for the fiscal year just ended to 430 billion yen ($4.6 billion) for the year through March 2011, a sign of how the recovery will allow more investment in the future, according to Ghosn.
Nissan plans to sell 3.8 million vehicles worldwide for the fiscal year through March 2011, up 8.1 percent on year.
Nissan sold 3.5 million vehicles in the year ended March 31. Sales were down in North America and Europe but recovered in Japan. In China, sales surged 39 percent to 756,000 vehicles, the company said.
Ghosn said Nissan sees offering affordable green vehicles as the key to growth, and has plans in place to do that.
"A year ago I said Nissan knows how to adapt and face a crisis. Today you can see how we have progressed and where we are headed," he told reporters at the automaker's headquarters. "We will emerge from this crisis more competitive and stronger."
Both Toyota and Honda have also reported better results for the fiscal fourth quarter compared to the same period the previous year, underlining a gradual auto recovery. The Japanese automakers all have their eyes on markets like China and India to fuel their continued rebound.
Nissan shares gained 1.1 percent to 745 yen ($8) in Tokyo.
