Nissan Motor Company is on track to miss its full-year profit goal, earning less than alliance partner Renault SA for the first time in a decade and underscoring the challenges they face in charting a post-Carlos Ghosn future.

The Japanese car-maker, which has been struggling to reignite earnings and sales while dealing with the fallout from the arrest of its ex-chairman, slashed its preliminary operating profit for the second time to 318 billion yen ($2.8 billion) for the year ended March, from 450 billion yen. The Yokohama-based company cited higher costs related to United States (US) warranties, an adverse operating environment and the impact of recent corporate issues on sales.

Even before the arrest of Ghosn, the architect of the global auto alliance with Renault and Mitsubishi Motors Corp, Nissan was reeling from an emissions scandal, a slide in profitability and an ageing product line-up. November's surprise jailing of Ghosn exposed deep rifts over control and decision-making. With Nissan bringing less profits into the venture, it may be harder for the Japanese automaker to rebuff calls for a full merger or closer integration.

It is negative, said Tatsuo Yoshida, an analyst at Sawakami Asset Management Inc.

“Nissan’s profits were inflated in the past few years. Sales were stretched in the US and they sold more cars than they could, mainly by pushing fleet sales. Now it is the real Nissan and its natural their profits are coming down,” said Yoshida.

Nissan shares fell 4 per cent in Tokyo on Wednesday, their biggest decline this year. The stock fell 22 per cent in 2018 and is up slightly this year. Renault, which owns 43 per cent of Nissan, fell as much as 5.5 per cent in Paris, its biggest intra-day drop of the year.

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