Nissan’s half-year net profit rose 25 per cent to US$2.3 billion, lifted by strong North American sales and new models, with a sharply weaker yen also boosting the firm’s bottom line.
Japan’s number-two automaker said it earned ¥237 billion in the April-September period, up from ¥189.82 billion a year ago, while sales rose 8.2 per cent to ¥5.14 trillion. Operating profit rose to ¥261.9 billion, up 18.0 per cent, said the maker of the Altima sedan and luxury Infiniti brand.
But Nissan also warned of slowing demand in its number one market China, as well as in Japan due to the April sales tax hike – a situation also faced by rival Honda, though it still reported a 19 per cent jump in first-half profit last week. Toyota, the world’s biggest automaker, announces it results on Wednesday.
“Nissan successfully overcame challenging market conditions in the first-half of the fiscal year, delivering solid revenues and profitability amid encouraging demand for our latest models,” the firm’s chief executive Carlos Ghosn said in a statement.
The firm added that “the improvement reflected strong unit sales growth in North America and signs of stabilisation in western Europe,” despite “slower demand in Japan and continued volatility in Russia and other emerging economies”. The increasing popularity of such vehicles as the Qashqai, Rogue and X-Trail also contributed to the positive results, Nissan said.
For the fiscal year to March, the firm slightly upgraded its sales forecast to ¥10.8 trillion from ¥10.79 trillion, while it left unchanged expectations for a ¥405 billion net profit and an operating profit of ¥535 billion.
Nissan’s announcement came after Honda said last week that its six-month net profit soared 19 per cent to ¥$2.67 billion, thanks to a lower yen, strong overseas sales and cost-cutting efforts. But Honda lowered its annual projections, citing a downturn at home, as well as China and other key Asian markets.
“The lower yen is undoubtedly a tailwind but factors other than that have not improved significantly from the first quarter,” said Credit Suisse analyst Masahiro Akita. “It is also unclear how demand in China – a core market for Japanese automakers – will fare” in the coming months, he said.
Japanese car companies have been big winners over the past year as a sharp drop in the yen inflated their repatriated profits, while sales accelerated in key markets including the US and China.
But on Tuesday, Nissan blamed “lingering” anti-Japanese sentiment for cutting its full-year sales target in China, the world’s biggest car market. “We reasoned that expected higher sales in North America would not be able to offset weak sales in light commercial vehicles, increasing competition in the compact passenger vehicle market and political head-winds that have affected Japanese brands in China,” Hiroto Saikawa, Nissan’s chief competitive officer, told reporters on Tuesday.
Japanese automakers’ sales in China fell off a cliff in late 2012 and into last year as a Tokyo-Beijing row over disputed islands sparked a consumer boycott of Japanese brands in the world’s biggest vehicle market. Rivals including General Motors and Volkswagen sought to capitalise on falling demand for Japanese-brand cars and grabbed market share away.
Nissan on Tuesday cut its 2014 sales target in China to 1.27 million vehicles from 1.43 million vehicles.