Nissan reports 233.7 billion yen loss for fiscal year battered by slowdown, strong yen

Nissan reports loss for year amid global slowdown

TOKYO — Nissan Motor Co., Japan’s No. 3 automaker, reported a 233.7 billion yen ($2.4 billion) annual loss, a reversal of fortune from the previous profitable year but better than the company’s own forecasts.

Nissan Chief Operating Officer Toshiyuki Shiga said Tuesday the automaker was hurt by three factors in the fiscal year ended March 2009 — the U.S. financial crisis, the global slowdown and the strong yen. But the red ink is expected to lessen for the fiscal year through March 2010, to a 170 billion yen loss, he said.

It was the first time Nissan had sunk to an annual loss since President and Chief Executive Carlos Ghosn took the helm a decade ago under an alliance with Renault SA of France, and wrested Nissan out of near-bankruptcy.

“We are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence,” Ghosn said, while remaining cautious about the future.

“The crisis is ongoing and market conditions are still volatile,” he told reporters at Nissan’s Tokyo headquarters.

Nissan had recorded a 482.3 billion yen profit for the previous fiscal year ended March 2008. In February, the automaker projected a 265 billion yen loss for the fiscal year ended March 2009. Analysts had also made forecasts close to Nissan’s.

Nissan is not the only Japanese automaker battered by the global slowdown.

Toyota Motor Corp., the world’s largest automaker, has fared worse, racking up a 436.9 billion yen annual loss, partly because of its size and its past success that had fueled an ambitious expansion drive.

Honda Motor Co., by contrast, has done better, managing to stay in the black for the fiscal year with a 137 billion yen profit.

Nissan’s sales plunged 22 percent from the previous fiscal year to 8.437 trillion yen. That was also better than Nissan’s initial sales forecast.

It sold 3.4 million vehicles worldwide, down 9.5 percent from the previous year, as vehicle sales dropped in the U.S., Japan and Europe.

But sales grew in China, according to Nissan, which makes the March subcompact and Infiniti luxury models.

Nissan said it expects to sell even fewer vehicles in the current fiscal year at 3.08 million.

Ghosn said the priorities for the year ahead would be to preserve cash, reduce losses and take advantage of the alliance with Renault.

He said Nissan remains focused on its own turnaround and was not entering any projects or partnerships with ailing General Motors Corp.

The deal that Nissan has with Chrysler SA to produce vehicles for each other will be reviewed because Chrysler may emerge from bankruptcy a “different” entity, Ghosn said. Fiat is acquiring a 20 percent stake in Chrysler.

Also Tuesday, Nissan said it will start making electric vehicles at its Oppama Plant in Yokosuka, Japan, from fall 2010, with production capacity of 50,000 vehicles a year. Demand for the vehicles is expected to grow with mass-marketing in 2012.

Ghosn expressed hopes that demand would pick up and the yen’s strength would abate, helping boost his company’s books.

The global auto industry was undergoing drastic change, and the key to determining the winners versus the losers was profitability, not just excellent technology and qualified engineers.

“It is unclear who is going to emerge the winner,” he told reporters.

Nissan shares fell nearly 1 percent to 510 yen. Earnings were announced shortly after trading ended on the Tokyo Stock Exchange.