Nissan has lowered its annual profit forecast on tumbling sales in the US as the Japanese carmaker grapples with the fallout from the ousting of Carlos Ghosn who has led the group for two decades.
In addition to a darkening outlook for sales in US and China, analysts predict further turmoil ahead as the Japanese carmaker addresses brand erosion, tensions with its alliance partner Renault and executive departures in the wake of Mr Ghosn’s arrest in November.
In its first earnings result since Mr Ghosn’s ousting, Nissan said it now expects a net profit of ¥410bn ($3.7bn) from ¥500bn it projected earlier as it cut its sales target in all of its key markets including Japan, China, US and Europe. That fell short of analyst expectations for a profit of ¥523bn, according to S&P Global Market Intelligence.
The group now expects to sell 5.6m vehicles for the fiscal year through March 2019, compared to its earlier target of 5.9m vehicles.
Under Hiroto Saikawa, Nissan’s chief executive, the company has sought to stem the slide in US profitability that was blamed on aggressive pursuit of market share under the Ghosn era.
Mr Saikawa also replaced José Muñoz as the head of its North American operation, with Denis Le Vot, a Renault executive.
Mr Muñoz, who was considered close to the former chairman, later left the company after Mr Ghosn was arrested on November 19 and later charged for allegedly understating his pay and making payments through a Nissan subsidiary to a Saudi businessman who helped to address his trading losses in the wake of the financial crisis. Mr Ghosn has denied the charges.
Still, Mr Saikawa’s turnround efforts have yet to bear fruit with Nissan’s US sales plummeting 19 per cent from a year earlier in January, far worse than the 6.2 per cent year-on-year fall for all of last year.
For the three months to December, the company said its net profit fell 77 per cent to ¥70.4bn in the absence of a US tax windfall it booked last year. Its operating profit increased 25 per cent to ¥103.3bn while revenue increased 5.9 per cent to ¥3.5tn.
The revised full-year operating and net profit forecasts also reflected ¥9.2bn in additional reserves to account for the pay Nissan was estimated to have paid Mr Ghosn after retirement, according to Tokyo prosecutors.