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Nissan to report 90% plunge in profit, double global job cuts to 10,000: report
[TOKYO] Nissan Motor Co will report a drop of about 90 per cent in its fiscal first quarter operating profit to several billion yen, well below analysts' estimates, the Nikkei newspaper reported without attribution.
The operating profit figure is the latest information to leak from the Yokohama-based carmaker before it reports quarterly results on Thursday. A year earlier, profit was 109 billion yen (S$1.38 billion) in the April-June period. Analysts had been projecting, on average, profit of 37.2 billion yen, according to estimates compiled by Bloomberg.
On Wednesday, Kyodo News reported that Nissan is planning to cut at least 5,200 additional jobs globally to improve its performance, on top of a plan unveiled in May to shed 4,800 jobs. The further cuts would take the total number of reductions to 10,000, or more than 7 per cent of Nissan's workforce.
Chief executive officer Hiroto Saikawa is facing intense pressure to turn around the automobile manufacturer following the arrest in November of Carlos Ghosn, the former chairman and architect of the global alliance between Nissan, Renault and Mitsubishi Motors Corp. Profits are at a decade low and Nissan is struggling in the US, where years of sales incentives eroded margins and expanded volumes through fleet sales.
A representative for Nissan didn't immediately respond to messages seeking comment on the Nikkei report.
Nissan is planning to refresh all core models, introduce 20-plus new products and focus on American retail sales over the next three years. The carmaker recently revamped the Nissan Skyline with design changes and features to make it more appealing to the Japanese market, and is also betting that passenger cars, especially electric sedans, will help drive future sales in China, Latin America and other growing markets.
Vehicle sales in the US fell 15 per cent in June, bringing the decline this year to 8.2 per cent. Deliveries in China, Nissan's biggest market, dipped 0.3 per cent in the first half.
The surprise arrest of Ghosn, who led Nissan and Renault for more than a decade, exposed rifts over control and decision-making between Nissan and Renault. Currently out on bail, Ghosn has denied all charges against him, saying his arrest was due to a "dirty game" played by some Nissan executives. He is now preparing for his trial, which may start later this year or next year.