The logo of Japanese automaker Nissan Motor is seen at the company’s head office in Yokohama on May 9, 2024. (Photo by Yuichi YAMAZAKI / AFP)
Tokyo, Japan — Nissan shares plunged more than 10 percent on Thursday after the Japanese automaker issued a profit warning, with CEO Makoto Uchida calling first quarter results “very challenging”.
The Japanese company now predicts a full-year net profit of 300 billion yen ($2 billion), down from 380 billion yen previously forecast.
Net profit in the first quarter plunged 73 percent year-on-year to 28.6 billion yen — far below analyst expectations of 97.1 billion yen.
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“While global sales remained even… profit was impacted by increased sales incentives and marketing expenses to meet intense sales competition and optimise inventory,” particularly in the United States, the company said.
Nissan’s disappointing first-quarter earnings come after it nearly doubled full-year net profit in 2023-24, partly thanks to the weak yen inflating its takings.
Nissan is also struggling to compete in the Chinese market with fast-growing electric vehicle firms backed by Beijing.
“Our first quarter results were very challenging” and “we have implemented measures to recover our performance,” Uchida said in a statement.
“First, we are optimising the inventory buildup in the US market,” he said.
“Then, from the second half we aim to maximise sales of new and refreshed models to achieve the revised forecast of sales volume and profit.”
Nissan shares tanked 11 percent right after the earnings release but recovered to close down 6.98 percent.