Nissan Motor Co cut its annual operating profit forecast by 43% on Thursday, as car sales fell and put more pressure on new management to repair a company that is still in trouble by the scandal involving former leader Carlos Ghosn.
The sharp decline in Nissan's profitability has prompted Nissan to plan layoffs, close production bases and reduce product supply, and the company has abandoned Ghosn's goal of actively pursuing market share, according to sources.
Japan's second-largest automaker reported its first quarterly net loss in nearly a decade, compared with its competitorsToyotaAndHonda MotorThe optimistic forecast is in sharp contrast.
"We are making progress, but sales have been weak, so we need to do more restructuring than originally planned," said Makoto Uchida, Nissan's new chief executive.
He did not elaborate on what steps might be taken, but added that the company's financial position would continue to be difficult in the next fiscal year as it needed time to repair profitability in the US, its second-largest market.
Nissan now expects operating profit of 85 billion yen ($775 million) for the fiscal year to March, well below the average estimate of 134.5 billion yen by 20 analysts surveyed by Refinitiv. The company also said it would not pay a dividend in the second half of the year, with an annual dividend of 10 yen per share, down sharply from 57 yen a year earlier.
Nissan's global car sales fell 11% this quarter, and its brand image has been severely damaged by years of discounts in the United States and other countries.
Nissan's u.s. sales fell 18%, and once-popular models, such as the Rogue SUV crossover and the Sentra sedan, fell out of favor. In China, the world's largest car market, car sales fell 0.6 per cent.
The company now expects to sell 5.05 million vehicles for the full year, its weakest sales since 2013. In the fourth quarter of last year, the company's operating profit fell 78%, with a net loss of 26.1 billion yen.
Nissan plans to cut at least 4300 jobs and close two factories as part of its overall plan to increase profits by at least 480 billion yen by 2023, sources said.
Sources said the measures were an expansion of a plan announced in July that would include a reduction in existing models, options and interiors, as well as cuts in marketing budgets and jobs at headquarters in the US and Europe.
Ghosn is also the head of alliance partner Renault. He was arrested in Japan in November 2018 and charged with withholding wages and using company funds for personal purposes. He denied any wrongdoing and dramatically fled to Lebanon last December while awaiting trial.
Nissan said on Wednesday that it had filed a civil lawsuit against Ghosn in Japan for 10 billion yen.