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Nissan reports second-worst results in history

  • May 28, 2020
  • , Jiji Press , 9:26 p.m.
  • English Press

Tokyo, May 28 (Jiji Press)–Nissan Motor Co. <7201> on Thursday reported a group net loss of 671,216 million yen for the year ended in March, the second-worst results in its history, due to restructuring costs as well as weak vehicle demand amid the coronavirus pandemic.
   

The Japanese automaker booked 603 billion yen in structural reform and fixed-asset impairment charges as it reduced its production capacity that ballooned under former Chairman Carlos Ghosn’s expansionary policy.
   

The largest annual net loss in Nissan’s history was 684.3 billion yen recorded in the year ended in March 2000, when it announced plans to close five plants in Japan.
   

For the year ended last March, the company posted an annual net loss for the first time in 11 years after reporting a profit of 319,138 million yen in the previous year.
   

Aiming to turn around its fortune, the automaker will implement additional restructuring measures, including closures of two factories abroad and a 20 pct reduction in global vehicle production capacity.
   

“We’ll thoroughly promote structural reform,” Nissan President and Chief Executive Officer Makoto Uchida told an online press conference.
   

The company posted an operating loss of 40,469 million yen, against 318,224 million yen in profit in the previous year. Its sales fell 14.6 pct to 9,878,866 million yen, sliding below 10 trillion yen for the first time in seven years.
   

Nissan’s vehicle sales fell in many markets, including North America, due to a delay in new model launches. The pandemic dealt an additional blow.
   

Its global vehicle sales totaled 4.93 million units, slipping below five million units for the first time in seven years.
   

 

The automaker stopped short of releasing its earnings projections for the year ending in March 2021.
   

The company said it will lower its global production capacity to 5.4 million units from 6.6 million units to raise its plant utilization rate to 80 pct or over.
   

Specifically, Nissan will close its plant in Indonesia to consolidate production there to Thailand. It will promote negotiations on shutting its plant in Barcelona, Spain.
   

It will pull out of the South Korean market while scaling back on some operations in Southeast Asia.
   

Nissan will reduce the number of vehicle models by 20 pct.
   

The company aims to slash fixed costs by 300 billion yen through these restructuring measures to achieve an operating profit-to-sales ratio of 5 pct by the year ending in March 2024.
   

The automaker also aims to focus its resources on the Japanese, North American and Chinese markets. It plans to launch 12 new models worldwide over the next 18 months.

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