Nissan Chief Hiroto Saikawa reported the automaker's earnings for 2017.
Despite a tough environment for the first nine months of its fiscal year, Nissan Motor Co. Ltd rallied to post increases in revenue and net income for 2017 and sales increases in its top three markets: the U.S., China and Japan.
Nissan’s January-March profit was 168.8 billion yen, or $1.5 billion, down from 249 billion yen last year. Quarterly sales fell 0.9% to 3.4 trillion yen, or $31.3 billion.
The automaker reported an operating profit of 574.8 billion yen, or $4.9 billion, on net revenues of 11.95 trillion yen, or $109 billion, equivalent to an operating margin of 4.8%. The operating profit was down from 2016 by 22.6% and margins fell 1.5%.
However, full-year net income rose by 12.6% to 746.9 billion yen, or $6.8 billion, as non-operating income and the favorable impact of U.S. tax reforms more than compensated for the reduction in operating profit.
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Hiroto Saikawa, Nissan CEO, noted that the Takata issue and problems with production inspection should be behind the automaker.
For the first nine months of the fiscal year, the automaker said it “faced significant costs associated with special items, inventory adjustments and negative pricing trends; however, a partial recovery was achieved due to solid performance in the final three-month period.”
The company also took hits on production losses due to its ongoing inspection issues as well as continued fallout from the Takata airbag problem. Those are expected to be behind the automaker now.
The company launched a new program in fiscal year 2017 named Nissan M.O.V.E. Designed to carry to 2022 mid-term plan, and global unit sales rose 2.6% to record-high unit sales of 5.77 million units. As a result, the company is forecasting sales for FY 2018 of 5.93 million units.
Nissan’s newly launched models including the Serena e-Power, new Nissan Leaf, Datsun Cross and Infiniti QX50 are expected to contribute to sales growth in this financial year. Sales in fiscal year 2018 are also expected to be enhanced by the launch of new models including the Altima, Sylphy Zero Emission and Terra.
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Nissan's Hiroto Saikawa said the company's new product entries this year should increase sales to nearly 6 million.
The company performed well in its three most important markets in 2017. Sales in Japan rose by 4.8% to 584,000 units mainly from contribution of the launch of the core models of Nissan Intelligent Mobility: the Note e-Power and the new Nissan Leaf.
In China, where Nissan reports figures on a calendar-year basis, unit sales rose 12.2% to 1.52 million units, equivalent to a market share of 5.6%. This was driven by demand for models including the Nissan X-Trail and Sylphy, as well as the growth of the Venucia brand.
In the U.S., Nissan’s sales reached 1.59 million units, equivalent to a market share of 9.2%. This was largely driving by the company’s growing line of utility vehicles.
However, Nissan sales in Europe, excluding Russia, fell by 4.6% to 652,000 units, impacted by the market decline in the UK and intensified competition in the crossover segment – both of which have been areas of strength for Nissan – which resulted in a market share of 3.6%. Unit sales in Russia, however, rose 12% to 105,000 units.
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In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales rose 1.3% to 819,000 units.