Nissan Motor’s second-quarter profit fell 16 per cent as a stronger yen eroded overseas earnings and the Japanese car maker increased incentives in the United States.
Net income declined to ¥146.1 billion (Dh5.14bn) in the three months through September from ¥172.8bn a year earlier, the company said. That compares with the ¥125.5bn average of seven analysts’ estimates compiled by Bloomberg. The automaker maintained its full-year profit forecast at ¥525bn.
In the Middle East and Africa, Asia and Oceania, and Latin America, Nissan’s sales decreased 4.9 per cent to 382,000 units.
But Nissan’s deliveries in the US climbed even as industrywide sales in the world’s second-largest market shrank, driven by an aggressive dealer-incentive programme that weighed on profit. The car maker boosted incentives to about US$4,000 per car, much higher than Japanese rivals and almost in the same range offered by the US motor manufacturers, according to Tokai Tokyo Research Centre.
The rising yen, which has strengthened more than 18 per cent against the dollar in the 12 months through September, is eroding Japanese competitiveness and lowering the value of repatriated earnings.
“It’s not good Nissan has been using incentives to push sales in the US,” said Seiji Sugiura, an analyst at Tokai Tokyo. “The yen is squeezing the Japanese automaker’s profit because it’s a lot higher than last year.”
Shares of Nissan climbed 1.7 per cent in Tokyo trading, before it announced earnings. The benchmark Topix Index rose 1.2 per cent.
Nissan’s deliveries in the US rose 3.7 per cent in the April-September period, compared with a 0.8 per cent decline in industrywide sales. It has boosted its market share to 9 per cent, compared with 8.5 per cent a year earlier, according to the researcher Autodata.
Demand for vehicles with smaller engines such as the Sylphy saloon and 4x4s including the X-Trail and Qashqai paced Nissan’s deliveries in China. Sales, including light commercial vehicles, increased 8.2 per cent in the year through September. That compares with 13.2 per cent expansion in industrywide deliveries of both passenger and commercial vehicles. Nissan is targeting to sell 1.3 million vehicles in the world’s biggest car market this year, including 1.08 million passenger cars.
Nissan’s deliveries in Japan fell 20 per cent in the first half of this fiscal year, dragged down by a slump in minicar sales.
The popularity of Nissan vehicles was dented by Mitsubishi’s scandal of exaggerating fuel economy for its own models and cars produced for Nissan.
The Nissan chief executive Carlos Ghosn, after completing the purchase of a stake in Mitsubishi Motors, pledged to change Mitsubishi’s culture and seek synergies.
* Bloomberg
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