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It’s official. All three of Japan’s big three carmakers are bracing for a decline in profits this year.
Nissan, Japan’s second-largest automaker which has an alliance with France’s Renault and Mitsubishi Motors, said it expects its net profit to fall 19 per cent from a year earlier to ¥535bn ($4.7bn) for the new fiscal year through March 2018. That fell below analyst forecasts for a profit of ¥618bn. Revenue is expected to rise 0.7 per cent to ¥11.8tn.
In line with rivals such as Toyota and Honda, Nissan also projected slowing sales in the US market where incentives are rising to sell cars as demand hits a peak in the country. The company said vehicles sales in the US are expected to grow 1.2 per cent in the 2017-2018 year compared to a rise of 4.2 per cent in the previous year.
“We are being very conservative about growth of vehicles sales in the US,” Hiroto Saikawa, Nissan’s new chief executive, said on Thursday.
Nissan’s profitability will also be hurt by a rise in research costs to develop autonomous driving technology and the cost of materials such as steel.
For the 2016-2017 fiscal year, Nissan reported a 27 per cent rise in net profit to ¥663.5bn.
A day earlier, Toyota warned that its net profit will fall for a second consecutive year – the first time since 1994 – due to the stronger yen and rising spending on car rebates in the US.