TOKYO: Shares of Nissan Motor fell by 6 per cent in morning trade on Friday, as the forecast for flat profit this year fell short of market expectations and as the chip shortage and rising costs cast a shadow on the Japanese automaker's turnaround.
Nissan has shifted its focus from volume to value, shedding the emphasis on big sales numbers, often at discounts, that it pursued for years before the ouster of former boss Carlos Ghosn. The company is aiming for higher sales margins while keeping costs down.
On Thursday, it reported that it had a fourth-quarter profit, but it said it expected only 1 per cent growth in operating profit for this year, missing expectations.
In morning trading, shares were down 3.5 per cent after earlier falling 6.3 per cent.
Companies around the world are warning of declining profitability as they can't pass on soaring input costs to consumers and are bracing for more supply chain hold-ups after the Ukraine conflict and prolonged COVID 19 lock-downs in China.
Toyota Motor said this week that unprecedented raw material costs could slice a fifth off its full-year profit.
Nissan chief executive officer Makoto Uchida told Reuters in an interview that the supply chain has become a challenge for the industry as manufacturers' assumptions can be quickly changed by real-time events.
The uncertainty around the supply chain - including measures to control COVID - 19 in China - is the biggest risk on the horizon, Uchida said.