TOKYO -- Nissan Motor on Tuesday lowered its net profit forecast for the full year through March 2020 to 110 billion yen ($1 billion), down 66% from the previous year and the lowest since fiscal 2009, the carmaker said Tuesday.
Its latest outlook is down 35% from its previous forecast in May. The Japanese carmaker continues to struggle, as demonstrated by its continued lackluster sales in North America and emerging markets.
Nissan's net profit fell 73% on the year to 65.4 billion yen in the first half through September. Sales dropped 10% to 5 trillion yen. Its operating profit was 31.6 billion yen, down 85%.
"Operating profit for the first half is behind the regional plan to achieve the initial full-year forecast," said Stephen Ma who was recently appointed Nissan's chief financial officer, a role that he will assume in December. Ma, speaking at a news conference Tuesday, also attributed the reasons for the downward revision to the yen's appreciation and global economic uncertainties.
However, Ma stressed that the carmaker was in the process of a turnaround. "We are starting to see the result of the ongoing efforts to improve our quality of sales, particularly in the U.S.," he said.
Under former Chairman Carlos Ghosn, Nissan focused on offering discounts and financial incentives in North America in the hope of gaining market share, but ended up cheapening the brand.
Ma explained that such sales incentives in the U.S. will gradually be reduced when new models are launched.
The company recorded 2.5 million vehicles in global sales for the first half of 2019, down 7% from the same period the year earlier. This reflected stagnation in North America and emerging markets including Asia, Africa and the Middle East. The delay in developing new models was also a factor.
Nissan announced in July it would cut staff numbers by 12,500 by March 2023. It will also reduce capacity by 600,000 vehicles at 14 plants, mostly in emerging markets.
Nissan has been on shaky ground since the arrest of Ghosn for alleged financial wrongdoing nearly a year ago. CEO Hiroto Saikawa, one of Ghosn's former lieutenants, also stepped down on allegations that he benefited from inappropriately inflated monetary rewards. Makoto Uchida was appointed last month as his replacement and is due to take on the role in December.
The new chief is expected to improve not only the performance of the company but also its relationship with French partner Renault, which has been strained since Ghosn's arrest. Following Nissan's management reshuffle, Renault CEO Thierry Bollore, another Ghosn ally, was also ousted in October.