Nissan's Profit Plunges, Outlook Revised Downward
Nissan's fiscal first quarter results were a stark contrast to the previous year, with profits plummeting by 73%. The Japanese automaker attributed this decline to intense competition, particularly in the U.S. market, which necessitated increased sales incentives and marketing expenses. These factors, coupled with the need to optimize inventory, significantly impacted profitability.
Despite the profit challenges, Nissan's global vehicle sales remained steady at 787,000 units. Quarterly sales also saw a slight increase of 3%, reaching 2.99 trillion yen ($19.6 billion). However, the company's fiscal first-quarter profit dropped to 28.6 billion yen ($187 million) compared to 105.5 billion yen the previous year.
Nissan remains optimistic about the future, aiming to improve inventory and recover sales and profits in the second half of the fiscal year. New models are also in the pipeline, including the Altima sedan, Z sportscars, and Infiniti luxury models.
The company has revised its full-year profit forecast downward to 300 billion yen ($1.9 billion) from an earlier projection of 380 billion yen ($2.5 billion). It expects to sell 3.65 million vehicles globally in the fiscal year ending in March 2025, compared to 3.4 million vehicles sold in the previous fiscal year.
Nissan's performance in key markets like the U.S. and China remains a concern, despite its focus on a sales growth strategy called "The Arc" based on electric vehicles. The global auto industry is undergoing a significant transformation, with growing emphasis on sustainability and environmental concerns. This shift towards EVs, fuel cells, and other green models presents both opportunities and challenges for established automakers like Nissan.
The company is committed to mass producing electric vehicles powered by next-generation batteries by early 2029. This ambitious goal reflects Nissan's determination to adapt to the changing landscape of the automotive industry and remain a major player in the future.