YOKOHAMA, Nov. 4, 2009 (Kyodo News International) --
(Editors: ADDING COMMENTS, FIGURES)
Nissan Motor Co. said Wednesday it expects to return to the black for the current business year through March with a group operating profit of 120 billion yen due to strong sales in China and some recovery in demand from government stimulus measures worldwide.
Nissan expects to strongly beat its earlier estimate of a 100 billion yen operating loss in the current year and swing back into profitability from the 137.92 billion yen loss booked in the previous year due also to aggressive cost-cutting efforts.
The company joins a string of other Japanese automakers like Honda Motor Co. (NYSE:HMC) and Mazda Motor Corp. (OOTC:MZDAY) in lifting their annual earnings outlook, helped in part by strength in emerging markets including China.
Global stimulus steps like the cash-for-clunkers program in the United States and Europe and similar tax breaks in Japan to promote sales of fuel-efficient cars have also improved demand eroded by the economic downturn.
Japan's third-largest automaker trimmed its group net loss forecast to 40 billion yen from an earlier projected loss of 170 billion yen on sales of 7 trillion yen, against the previous forecast of 6.95 trillion yen.
The company, which is 44 percent owned by France's Renault SA, also raised its global sales target for fiscal 2009 to 3.3 million units from an earlier 3.08 million units, though down 3.3 percent from the previous year.
For the April to September period, Nissan saw demand decline heavily in key markets like North America and Europe but sales in China jumped 19.3 percent from a year earlier to 332,000 units. For the full year, it plans to sell 712,000 units in China, up 30.6 percent on the back of brisk sales of its Tiida and Sylphy models.
Sharp production cuts by automakers also eased as signs of a pickup in demand emerged. Nissan raised its annual global output target to 3.17 million units from an earlier 2.95 million units, representing a year-on-year increase of 2.8 percent.
In the first six months of the current business year, Nissan booked a group net profit of 9.0 billion yen, down 92.9 percent from a year earlier. Its operating profit dropped 50.5 percent to 94.88 billion yen on sales of 3.38 trillion yen, down 30.5 percent.
For the July to September quarter, Nissan returned to the black with a group net profit of 25.53 billion yen following three consecutive quarters of red-ink figures.
But Chief Operating Officer Toshiyuki Shiga said the global auto industry continues to face risks like currency volatility and a rebound in raw material prices. Nissan expects the U.S. dollar to trade on average at the 85 yen level during the October-March period.
''Our performance in the first half of fiscal 2009 is encouraging, but the full-year environment remains volatile and uncertain,'' Shiga told reporters.
To meet growing demand for affordable and fuel-efficient cars, Nissan said it will begin production of its first model of a global compact car in Thailand from next March followed by production in India and China, with an annual sales target of 1 million units.
The automaker eventually plans to launch three models -- a hatchback, sedan and compact multipurpose vehicle -- in the next three years.
Last week, Honda, Japan's second-largest automaker, nearly tripled its group net profit forecast for the business year to 155 billion yen, against an earlier projection of 55 billion yen and up 13.1 percent from the previous year.
Toyota Motor Corp. is scheduled to announce its first-half earnings results on Thursday.
