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M / SUNNY
Nissan Motor Co. is forecasting a wider-than-projected operating loss for the current fiscal year, as the impact from the coronavirus pandemic forces the automaker to accelerate cost-cutting measures.
The operating loss for the year ending in March will be 470 billion yen ($4.5 billion), compared to analysts’ average forecast of a loss of 216 billion yen and a loss of 40.5 billion yen last year. Yokohama-based company also plans to skip its dividend, he said Tuesday in a statement.
The carmaker is struggling to restore profitability and sales after reporting its biggest loss in two decades. Nissan has been mired in turmoil since the 2018 arrest of former Chairman Carlos Ghosn, who had pushed for volume growth. The company is seeking to revive an aging lineup and cut costs in an effort to improve margins and bring more cash into operations.
“It’s going to be a very challenging year,” Makoto Uchida, Nissan’s chief executive offficer, said at a news conference.
Nissan shares fell 35% this year to a 14% decline in Toyota Motor Corp shares. and a 13% decrease in Honda Motor Co.
The end of the division bills is a severe blow to Renault SA, the largest shareholder of the Japanese automaker with a 43% stake and its spouse in a global auto production alliance. Nissan’s functionality in the last quarter will be Renault’s net profit across 1.2 billion euros, the automaker said in a statement. Renault is expected to publish its effects on Wednesday.
Nissan will close 3 production lines and cut about 14,000 jobs worldwide, compared to 12,500 a year ago. It will also close two leased offices near Nissan’s Yokohama headquarters due to the pandemic, said one user familiar with the matter. Nissan expects to sell 4.13 million cars in the existing fiscal year, up from 4.93 million sets from the previous period.
Mitsubishi Motors Corp., which partners with Nissan and Renault SA, predicted a bigger-than-estimated full-year loss Monday, and announced plans to end production of its Pajero SUV by shutting down a plant in Gifu prefecture.
“It wouldn’t make sense if the cuts were only effective in the short term,” said Tatsuo Yoshida, a Bloomberg Intelligence analyst. “I’m interested in sustainability and load reductions.”
The Japan Times LTD. All rights reserved.