Nissan Posts First Loss Under CEO Ghosn

May 12, 2009
Company's first loss since the fiscal year 1999

Nissan Motor Co., Japan's number three automaker, announced on May 12 its first annual loss in almost a decade and said it expected to stay in the red this year because of slumping sales.

Nissan, which is cutting 20,000 jobs to cope with the crisis, logged a net loss of 233.7 billion yen (US$2.4 billion) in the year to March, against a year-earlier profit of 482.3 billion yen.

Nissan, in which France's Renault has a 44% stake, said annual sales fell 9.5% to 3.41 million vehicles in the last year. Demand slid 19.1% in the United States, 15.1% in Japan and 16.7% in Europe.

The group posted an operating loss of 137.9 billion yen, against a year-earlier profit of 790.8 billion yen. Revenue fell 22% to 8.44 trillion yen.

It is the company's first loss since the fiscal year 1999 when chief executive Carlos Ghosn was parachuted in by Renault to rescue the company from the brink of bankruptcy. "2009 will be another challenging year," said Ghosn, who joined Nissan as chief operating officer in 1999 and took the helm the following year. "The global economic recession and financial crisis continue, but we are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence."

"We remain cautious about the economic environment and fully focused on our company's recovery efforts," said Ghosn, who also heads Renault.

Nissan expects a net loss of 170 billion yen for the current business year to March but aims to return to the black next year. "We are preparing ourselves to be back to profit, in the worst case, in 2010," said Ghosn.

The automaker said it has no plans to close factories in Japan and is committed to maintaining domestic production at one million vehicles per year, but it wants to source more parts from outside Japan to become more competitive.

Nissan is pinning its hopes on emerging markets such as Brazil, India, Russia and China, known as the BRIC nations, to drive a recovery. "We continue to focus on BRICS, the Middle East and North Africa and we're well positioned to grow in emerging markets when economic growth resumes and demand rises again," Ghosn said.

Nissan, which was slower than rivals Toyota and Honda to embrace fuel-sipping petrol-electric hybrids, aims to take a lead in zero-emission cars and will start producing electric vehicles in Japan in late 2010. The company said it would initially produce 50,000 electric vehicles a year at its Oppama plant near Tokyo, with an eye on starting mass-marketing in 2012.

Copyright Agence France-Presse, 2009

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