Nissan forecasts bleak times ahead |
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Sat, 29 Oct 2005 16:05
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TOKYO - The world's ninth biggest and Japan's second-biggest auto maker Nissan Motor Co. has reported a 5.5 percent dip in quarterly profits today and has said that the full-year earnings would also be flat as the price war in the US and rising material costs affected its performance in the quarter.
"I would say that three months on, the risks that we have outlined look even bigger," said Chief Executive Carlos Ghosn on the unprecedented discounts offered in the United States as well as the spiraling costs of raw materials.
"On top of this we have the unfortunate tragedies from hurricanes, earthquakes and floods (around the world). All of this has so far made the year 2005 a very challenging year for car manufacturers." He was of the opinion that the ongoing price war among carmakers in North America was hurting all manufacturers.
In the quarter ending September 30, Nissan posted an operating profit of 205.2 billion yen or 8.7 percent. This figure was less than the 10.3 percent posted a year ago. However, the maker of Maxima and Micra models saw net profits increase by 8.1 percent to 125.0 billion yen. The revenue front was also cheerful and increased by 11.5 percent to 2.346 trillion yen. Nissan's sales figures also looked healthy and soared 15.6 percent to 955,000 vehicles.
This was in spite of releasing only two new models in the first half of the year. Even local rival Honda Motor Co has reported dropping second half profits prompting Ghosn to say, "You're going to see the same story everywhere." He said that the spiraling fuel costs and the widespread consumer caution were also responsible for the gloomy picture in the quarter.
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