Nissan profit drops 99% but EV sales will help

Nissan chief executive Hiroto Saikawa is axing about 12,500 jobs worldwide and expects new technology around artificial intelligence (AI) and zero emissions to boost sales.

This comes as part of a new plan to revive Nissan after a 99% drop in operating profit in the latest quarter of falling sales in every major market, except China.

Nissan is a world EV leader, with the new Nissan Leaf due in Australia (under A$50,000) from August 1 and in New Zealand (under NZ$60,000) a few weeks later.

While Saikawa says the latest results are more negative than expected, he’s confident they will recover.

“We thought the situation would be challenging. But the actual retail performance was slightly under what we expected.”

Profit tumbled to 1.6 billion yen (A$21 million or NZ$22m) in the fiscal quarter ending June 30. Nissan’s quarterly results, announced on July 25, show a 95% net income drop to 6.4b yen in the April-June period.

In the three months, Nissan’s revenue dropped 13% to 2.37 trillion yen.

Its global vehicle sales in the quarter fell 6% to 1.23 million vehicles.

Saikawa is also trying to maintain a good relationship with Renault which owns 43% of Nissan, while aiming to rebuild US sales to 1.4 million vehicles in the fiscal year ending March 31, 2023.

Nissan is struggling to fix its brand image and resume growth after the arrest of former chairman Carlos Ghosn, who maintains his innocence while awaiting trial in Japan on allegations of financial misconduct, Associated Press (AP) reports.

The sales drop is also attributed to an economic slowdown in main markets like the US and China, Brexit uncertainty, and the race by automotive brands to embrace new technology as cities move to ban polluting vehicles.

Increasing raw material costs and fluctuations in currency also hit profits, Nissan says.

A further 4800 jobs were cut in May, and Saikawa says 6400 cuts have already been made in eight locations worldwide, mostly in factories working below capacity.