Nissan reports first-quarter results for fiscal year 2019

YOKOHAMA, JAPAN: Nissan Motor Co., Ltd. announced financial results for the three-month period ending June 30, 2019. In the first quarter of the fiscal year, Nissan generated an operating profit of 1.6 billion yen on net revenues of 2.37 trillion yen, equivalent to an operating margin of 0.1%. First quarter net income1 fell by 94.5% to 6.4 billion yen.

Global total industry volume remained weak during the quarter, and Nissan’s unit sales decreased as the company continued its efforts to normalize sales. Profitability was negatively impacted by the decrease in revenues and external factors such as raw material costs, exchange rate fluctuations and investments to meet regulatory standards.

On a management pro forma basis, which includes the proportionate consolidation of results from Nissan’s joint venture operation in China, operating profit was 40.1 billion yen, equivalent to an operating margin of 1.5%, and net income1 amounted to 6.4 billion yen.

In the first quarter of fiscal year 2019, global total industry volume decreased 6.8% to 22.5 million units, while Nissan’s global unit sales decreased 6.0% to 1.23 million units.

In Japan, Nissan’s sales decreased 2.6% to 126,000 units. The all-new Nissan Dayz was well received when it went on sale in March, with demand remaining very strong throughout the quarter.

In China, where Nissan reports figures on a calendar-year basis, unit sales increased 2.3% to 344,000 units, representing a market share of 5.7%, a 0.7 percentage point increase from the comparable period in the prior year. This was driven by strong demand for models including the Sylphy sedan and Qashqai and X-Trail crossovers, as well as Venucia-brand models such as the T60 crossover.

In the U.S., Nissan’s sales totalled 351,000 units, equivalent to a market share of 7.9%. Nissan sales in Europe, including Russia, fell by 16.3% to 135,000 units. Market share in Europe was 2.5%. Unit sales in Russia decreased 21.7% to 18,000 units, equivalent to a market share of 4.1%. In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales decreased 13.1% to 174,000 units.

Progress of operational restructuring initiatives Nissan is implementing strategic reforms in order to build an operational base that will ensure consistent and sustainable profitability over the medium term.

The company is moving quickly to optimize cost structures and manufacturing operations, while also enhancing brand value, steadily refreshing its lineup and achieving consistent growth globally, including in the U.S. To improve its overall utilization rate, Nissan will reduce its global production capacity by 10% by the end of fiscal year 2022.

In line with production optimizations, the company will reduce headcount by roughly 12,500. Furthermore, the company will reduce the size of its product lineup by at least 10% by the end of fiscal year 2022 in order to improve product competitiveness by focusing investment on global core models and strategic regional models.

While some of these initiatives are already underway, the company expects that substantial improvements in its performance will take time. As a driving force for growth and transformation, the company will leverage its Nissan Intelligent Mobility vision as a core strength in continuing to make substantial investments in technologies that will strengthen the product competitiveness.

This includes the ongoing rollout and evolution of the company’s ProPILOT driver assistance system, as well as the launch of vehicles with electrified powertrains, including e-POWER models and battery-electric models, in new markets.

Additionally, Nissan will continue to expand into new business areas, as demonstrated by the recently-announced exclusive agreement with Waymo to explore driverless mobility services in Japan and France, and public field tests of new mobility services with DeNA.

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