Nissan (NSANY) has targeted to make its light commercial vehicle (LCV) business the key driver of growth. The company is focusing on emerging economies both for market expansion and for establishing a source base. Nissan's 5-year plan GT 2012, focuses on quality leadership, zero-emission vehicles leadership, cost leadership, business and market expansion and 5% revenue growth on an average during 2008-2012.

Nissan Motor, in partnership with Dongfeng Motor Co., Ltd. launched the all-new X-TRAIL model in China. X-TRAIL is the fourth passenger vehicle launched in fiscal 2008. The model will be offered in five grades, including two with the gasoline-powered 2.0 liter engine (MR20DE), and three with the gasoline-powered 2.5 liter engine (QR25DE).

In the second quarter, the company reported earnings per diluted ADR of $0.34 compared to $0.47 in the same quarter of FY2007. The decrease was primarily driven by the negative impact of foreign exchange rates, significant decline in the US market, provisions for risk on leased vehicles in North America and product mix deterioration. Net revenues decreased 3.7% to $23.77 billion.

Increasing prices of energy and raw material as well as higher incentives and launch costs are eroding profits of Nissan. Further, with volumes going down, the overall automotive industry poses a challenge. The company halved its profit forecast for the fiscal 2008. Thus, we rate the stock a Hold with a target price of $9.60.