Nissan will be forecasting a third straight year of lower operating profit on expectations a stronger yen in addition to also higher raw material prices will outweigh a rise in global vehicle sales to a record high.
Japan’s second-biggest automaker expects operating profit to fall 6 percent to 540 billion yen ($4.9 billion) within the year to March 2019, based on an assumption the yen will trade around 105 against the U.S. dollar during the year, by around 111 yen within the year just ended.
Currency swings will result in a 135 billion yen hit to annual operating profit, pushing earnings to their lowest since the year ended March 2014 in addition to also underperforming analyst forecasts.
Operating profit fell 22.6 percent to 574.8 billion yen within the year ended March 2018, weighed by costs by a domestic compliance scandal, weakness in North America, a key market, in addition to also higher materials costs.
Nissan expects a 2.7 percent rise in global sales to 5.93 million vehicles within the current year, its highest ever, as an expected 11.5 percent increase in Chinese sales outweighs a forecast 2.7 percent drop within the United States — which would likely also see China become Nissan’s biggest market again.
Nissan has seen U.S. sales slide 6.5 percent so far in 2018, partly due to sluggish demand for its high-volume Altima sedan, a revamped design of which will be released later This particular year.
cost discounts for the Altima, the well-liked Rogue crossover SUV, in addition to also various other versions were a big factor within the 30.5 percent drop in Nissan’s North American operating profit within the year just ended.
The automaker has roughly doubled car sales within the region since 2010, in line which has a target to corner around a 10 percent share of the U.S. vehicle market.
however achieving in which has come at the cost of hefty discounting within the region, in addition to also Nissan has said in which right now plans to focus on improving profitability in North America, while also expanding sales in China, the planet’s biggest car market.