TOKYO – Nissan Motor expects a loss of 670 billion yen ($6.4 billion) this fiscal year, the Japanese automaker said Tuesday, following its large loss of 671 billion yen in 2019, which marked the worst loss in 20 years.
It will also revel in its largest operating loss of 470 billion yen ($4.4 billion), as the company continues to enjoy a drop in sales amid uncertainty about the effects of the coronavirus pandemic. In fiscal year 2019, Nissan recorded an operating loss of 40 billion yen.
The loss for this year will be affected by the weakened functionality of its affiliates, adding Mitsubishi Motors, and by additional restructuring and deterioration costs, which represented the maximum loss of last year. The troubled automaker expects an additional drop in its core business with fewer car sales.
“The forecast for fiscal year 2020 is very severe, due to a complicated business environment and our restructuring,” said CEO Makoto Uchida. “But I think we can achieve an operating profit margin of 5% and a 6% market percentage, our milestones, until 2023.”
The company said it would have a market percentage of 5.73%, last year’s point in fiscal 2020.
Nissan expects to sell 4.12 million cars globally this year, down 16.3% from 2019, in line with the company’s forecast of a global demand plunge of 16% and on par with sales posted in fiscal 2010, when it was still suffering from the aftermath of the global financial crisis. Nissan continues to witness declining car sales from its peak of 5.77 million in 2017.
But the company sees the first symptoms of a recovery. The Kicks cross-application vehicle debuted last month in Japan as the company’s first new style in two and a half years, ultra-small kei cars. Nissan also unveiled its Rogue crossover in the United States in June, chief operating officer Ashwani Gupta said Tuesday that the company had sold 11% of its cars online between April and June, in part covering a significant drop in visitor traffic in key markets.
Nissan will forget the dividend as it did at the end of fiscal 2019, and its shares fell 4.3 percent on Tuesday. The automaker also reported a net loss of 285 billion yen for the period from April to June.
Nissan had said in the past that global demand for automobiles would be reduced from 15% to 20% this year due to the pandemic, without revealing its forecast for 2020.
Mitsubishi Motors, the wife of Nissan’s French-Japanese alliance with Renault and in which Nissan owns a 34% stake, announced an estimated 360 billion yen loss on Monday this year.
As a component of the medium-term plan announced in May, Nissan will do so in its key markets – North America, China and Japan – as well as in new technologies and models through 2023, while reducing global annual capacity by 20% to 5.4 million vehicles.
It will also launch 12 new models over the next 18 months to attract customers, adding its new Ariya, an all-electric crossover SUV that the manufacturer relies on polishing its brand. He also said he would renew the life cycles of cars at least every 4 years, instead of the five existing ones.
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