Nissan Motor Co. turns into least profitable carmaker in Japan

Nissan Motor Co. was reported to have become the least profitable car manufacturer in Japan despite a weaker yen which boosted earnings at most of the nations exporters.

Nissan Motor made an official statement announcing that its net income rose 57% and reached 84.3 billion yen (825 million dollars) in the fourth quarter. As reported by Bloomberg, while net income topped the average analyst estimates, it was 3.3% of revenue, which is the lowest margin among all Japanese car manufacturers last quarter. The operating profit of Nissan was smaller than the median one expected by most analysts.

Nissans net income in the quarter was reported to be 33% higher than the average of 9 analysts estimates compiled by Bloomberg. On the other hand, the companys operating profit was estimated to 78.7 billion yen, 29% below average projections. Year-earlier figures were also adjusted by the company to reflect accounting changes.

This has been quite an unexpected surprise for Nissans Chief Executive Officer Carlos Ghosn, under whom the company proved itself to be a leader in profits on the Japanese market almost two years ago. This was the time when Nissan was faster than its rivals in recovering from the natural disasters in the region in 2011 by transferring production overseas in order to take advantage of the stronger yen and expand in emerging markets. Today, however, the company is trying to recuperate from production delays, faces slower emerging markets growth and misses out analysts estimates.

One of the auto analysts, who work for the investment analysis firm Longine – Tsuyoshi Mochimaru said for Bloomberg: “There’s a sense of crisis in the company and Ghosn has started to address problems. Things will improve, but will take some time.”

Currently, Nissan Motor Co. Ltd is the largest Japanese carmaker by volume in China. The companys deliveries in the region increased 17% and reached 1.27 million units in 2013. In addition, according to the China Association of Automobile Manufacturers, industrywide sales in China are forecast to increase by as much as 10% in 2014.

The Chief Financial Officer of Nissan – Joseph Peter said in an interview in December 2013 that the company projects its China sales to beat industrywide growth this year.

Nissan Motor Co. Ltd rose by 0.11% in Tokyo to settle the session at JPY885, and its one-year return rate is down 7.78%.