Nissan quarterly profit down 11 pct on yen, shrinking sales

TOKYO – Japanese automaker Nissan Motor Co. is reporting a 136.4 billion yen ($30.7 million) profit for the fiscal quarter through June, down nearly 11 per cent from the same period a year ago, after a mileage testing scandal at its supplier hit its minicar sales in Japan.

The result released Wednesday was in line with forecasts from analysts surveyed by FactSet. Quarterly sales shrank 8.4 per cent to 2.65 trillion yen ($25 billion) due to a stronger yen, which slams overseas earnings for exporters like Nissan.

Yokohama-based Nissan, which makes the March subcompact, Infiniti luxury brand and the Leaf electric vehicle, kept its full-year forecast for a 525 billion yen ($5 billion) profit, up slightly from the 524 billion yen earned the previous fiscal year.

Minicars are cars with tiny engines that are popular in Japan because they are fuel-efficient and eligible for tax breaks. Nissan, which does not have minicars in its lineup, procures them from Mitsubishi Motors Corp.

But both Mitsubishi and Nissan minicar sales nose-dived after Mitsubishi Motors acknowledged that it had systematically lied about the mileage performance of its minicars.

Nissan’s overall vehicle sales in Japan dropped 25 per cent from a year earlier, and its market share also dipped by nearly 3 percentage points to 8.3 per cent, it said.

Nissan is taking a 34 per cent stake in Mitsubishi to help its turnaround, although Nissan Chief Executive Carlos Ghosn has stressed that the deal will not be final pending full “due diligence.”

“Encouraging demand for core products, particularly in North America, and our continued focus on cost efficiencies contributed to an improved underlying performance,” Ghosn said of the earnings results.

Nissan’s vehicle sales rose nearly 8 per cent in the U.S. for the quarter compared to a year ago.

But Nissan blamed volatility in emerging markets for the lower profit, noting vehicle sales dipped in South America, the Middle East and Africa.


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