Nissan Motor Co said Friday it had cut its net profit forecast for the current financial year to 355 billion yen ($3.62 billion) from 420 billion yen due to weak sales in Europe and some Asian economies.
Japan’s second-largest carmaker also trimmed its operating profit outlook for the year through March 2014 to 490 billion yen from 610 billion yen it had predicted in late July, while sales were predicted at 10.19 trillion yen down from 10.37 trillion yen.
Nissan Chief Executive Carlos Ghosn blamed the downward revision on sluggish market conditions in Europe and volatile demand in some emerging economies such as Thailand, Indonesia, Brazil and Russia.
For the first half of the financial year, Nissan saw vehicle sales in Europe fall 6.1 per cent to 308,222 units, while those in North America, the carmaker’s biggest market, jumped 13.8 per cent to 800,181.
During the first half, Nissan had nine plants under construction or in expansion at the same time, Ghosn said.
“We knew that we were stretched,” he said. “A little bit of bad news, we could overcome; too much bad news — impossible.” Ghosn also attributed the revision to higher-than-expected recall costs.
In September, Nissan recalled about 910,000 vehicles worldwide because of a flaw in an accelerator sensor, which could lead to, in the worst case, a stalled engine.
Ghosn said he is confident that Nissan has the capacity to respond to such difficult situations.
On Friday, Nissan also reported an 18.7-per-cent drop year-on-year in operating profit to 113.8 billion yen for the July-to-September quarter while it logged a net profit of 107.8 billion yen, up 2 per cent from the same period a year ago.
Nissan said its sales for the quarter grew 16.4 per cent to 2.52 trillion yen.