(Tokyo) Nissan announced strong annual results on Thursday that were up sharply and higher than the preliminary figures it had revealed by surprise in April, but it anticipates a drop in its net profit in 2024/25 as it faces intense competition Chinese electrified.
“We delivered solid results” despite a “difficult” market environment, with more fragmentation and increased competition,” commented the general manager of the Japanese manufacturer, Makoto Uchida, during a press conference.
Nissan forecasts a net profit of 380 billion yen for its new fiscal year starting on 1er April, which would be a decline of 10.9% from 2023/24, when its net profit almost doubled to 426.6 billion yen.
But thanks to positive currency effects linked to the very weak yen and cost savings, Nissan expects a further increase in its annual operating profit, to 600 billion yen (+5.5%).
Its operating profit soared 51% in 2023/24 to 568.7 billion yen, due in particular to dynamic global sales, the decline in costs of raw materials such as steel and aluminum and the effects positive exchange rates.
Mr. Uchida, however, qualified Thursday the advantage for his group of the fall of the yen, currently at its lowest against the dollar since 1990: “In the short term we see a benefit from exchange rates”, but for the medium and long term In the long term, if their volatility is very high, this poses a “problem” for planning investments and making other strategic decisions, he stressed.
Nissan’s annual turnover is also expected to continue to improve, at 13.6 trillion yen, an increase of 7.2% compared to its sales over the past financial year, where they jumped by 19. 7%.
The manufacturer based in Yokohama (southwest of Tokyo) is also counting on an acceleration in its volume sales in 2024/25, to 3.7 million vehicles (+7.5%), compared to 3.44 million. units sold over its last financial year (+4.1%).
In major discussions with Honda
Its sales volume in China fell sharply over the past financial year (-24.1%, or -16.1% on a comparable basis). But this hemorrhage, due to fierce competition from Chinese manufacturers, who are slashing prices in electric vehicles, has been offset at the global level by dynamic sales in North America, Europe (where its hybrid vehicles have stood out) and in Japan.
Nissan also highlighted on Thursday the rise in its sales in China for two consecutive quarters, while admitting that the local market environment remained “difficult”.
According to its new medium-term plan unveiled at the end of March, Nissan intends to return to 4.5 million vehicles sold per year within three years, while significantly improving its profitability, by launching no less than 30 models over the period while reducing its costs in electricity and by establishing “intelligent partnerships”.
Nissan has been discussing a possible “strategic partnership” in electricity and software since March with its compatriot and historic rival Honda, two enormous challenges that they have in common.
“We have formed discussion teams” on the different possible areas of collaboration, which are very extensive, declared Thursday Mr. Uchida, who said he was closely following the evolution of these negotiations. “We want to reach a positive conclusion for both parties as soon as possible.”
The size of the old alliance between Renault and Nissan, a recurring source of tensions in the past, has been significantly reduced since last year, with the two manufacturers now selecting their joint projects on a case-by-case basis. Like for example in Europe, where Nissan decided last year to invest 600 million euros in Ampere, the electrical subsidiary of its French partner.
Nissan’s profits in its fourth quarter (January-March 2024) will result in a positive contribution to Renault’s net profit in its first quarter of 2024 to the tune of approximately 225 million euros, the French group announced on Thursday in a separate press release.
Renault currently still owns 39% of Nissan, but only holds 16.2% directly, as part of the rebalancing of their capital links decided last year.
reference: www.lapresse.ca