Cautionary hopes for Nissan

Cautionary hopes for Nissan

In the first quarter of its 2022/2023 financial year, Nissan saw its sales fall by 21.8% and its operating profit drop by 14.2%. The Japanese admit that the market is tougher than expected but remain optimistic for the coming months.

Ashwani Gupta, Nissan’s chief operating officer.

After returning to profitability last March, Nissan is starting its 2022/2023 financial year with results that reflect the current problems of the automotive industry. Despite global sales falling 21.8% in its first quarter, to 819,000 units, Nissan saw its sales increase 6.4%, to 2,137.3 billion yen (15.5 billion euros). Its operating profit fell 14.2% to 64.9 billion yen.

Its sales fell by 15.2% in China, 38.6% in the United States and 25.2% in Europe, but remained strong in Japan. Nissan explained in its press release that it suffered from “very difficult market environment“, between the Shanghai restrictions, the ongoing shortage of semiconductors and the rise in the price of raw materials and equipment costs.

The market environment remained tougher than expected“and will remain”uncertainty“in the coming months, he warned his chief executive Makoto Uchidaquoted in a press release.

But the Japanese are also better prepared than in the past to withstand external shocks, according to Makoto Uchida, especially welcoming the launch of new models to increase sales, including a small electric car in Japan called “Sakura” and a new version of its hybrid . X-Trail compact SUV.

Strong customer demand for our new products contributes to higher revenue per unit“that the group recorded in the first quarter, also emphasized its executive director Ashwani Gupta during a press conference.

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Nissan believes it has succeeded in reducing the wind by continuing to improve”sales quality“, that is, by selling its most expensive cars, as well as remaining”observe financial discipline” and control of its fixed costs, according to its press release.

The manufacturer says it has also benefited from the favorable currency effect associated with the fall of the yen in recent months, especially against the US dollar, which has boosted its revenue in the US, one of its key markets.

Its net profit in the first quarter, however, fell 59% year-on-year to 47.1 billion yen (some 340 million euros at current rates). But the sharp decline in these results is due to a negative base effect, compared to Nissan’s improved profit, a year earlier, and a large exceptional gain from the sale of its stake in Germany’s Daimler.

100,000 more sales in 2022/2023

The French Renault affiliate continues to target a net profit of 150 billion yen in its full financial year 2022/2023 (which would be a drop of 30% in one year), with an operating profit of around 250 billion yen and annual sales have increased by 18.7% to 10,000 billion yen (72.3 billion euros at current prices).

Nissan also maintained its goal of selling 4 million vehicles worldwide in 2022/2023, nearly 100,000 units more than in 2021/2022. “We move forward with cautious optimism“, said Ashwani Gupta.

In China, all Nissan dealers”they have now resumed operations and returned to 100% of their operating levels, and 100% of Nissan dealerships have reopened.“in the country and their attendance is increasing,” he said.

In terms of semiconductors, the group has achieved inventory levels with suppliers and basically serves its main models and markets, continued the director of operations. In the medium term, Nissan is looking to develop alternatives to its current chips and replace specialized chips with more generic, and therefore more widespread chips, added Ashwani Gupta.

Finally, to reduce the impact of rising raw material prices, the manufacturer is trying to reduce its use of precious metals, is exploring direct supply options for some long-term raw materials and is using threading tools to stabilize its prices. (together with AFP)