Nissan benefits from Chinese growth as profits surge 37% for quarter
Nissan Motor Corp.'s net income jumped 37 percent to 112 billion yen for the three-month period ending in June on strong sales in China and the United States.
The profit increase may signal that CEO Carlos Ghosn is gaining traction after making dozens of executive changes in November to improve execution and cut incentives in the United States. Still, the company cautioned its growth in Asia's largest economy may slow.
"The full-year guidance isn't conservative," Joji Tagawa, a Nissan corporate vice president, said at an earnings briefing. "'We gave warnings two years in a row and this year we intend to hit guidance. We have learned a lot of lessons since November and taken many measures, so we are seeing the results now.''
Even so, the automaker has cut deliveries to dealers in China beginning this month, on signs inventory was building up since the end of June on intensifying competition, he said.
Deliveries have outpaced Honda Motor Co. and Toyota Motor Corp. in China this year, as Nissan chases its targets of 8 percent operating margin and global market share.
"In terms of their full-year plan, they are pretty much on track," said Kota Yuzawa, an auto analyst at Goldman Sachs Group Inc. in Tokyo. "Their China sales are quite strong this year."
China sales
In China, where Nissan is the biggest Japanese automaker, sales rose 21 percent in the quarter to 283,000 units, boosted by the X-Trail SUV.
Nissan aims to gain a 10 percent share of the market in China, which accounts for a quarter of the automaker's sales by volume. The company has said it expects to sell more than 1.4 million units in China this year.
The growth in profit was also helped by Nissan's premium Infiniti brand. Deliveries in China more than doubled from a year earlier.
While sales are expanding in China and the United States, Nissan is grappling with startup costs of new plants in emerging markets. The carmaker opened its second plant in Thailand this month and will start production at its fourth plant in China later this year.
"The full-year guidance isn't conservative," Joji Tagawa, a Nissan corporate vice president, said at an earnings briefing. "'We gave warnings two years in a row and this year we intend to hit guidance. We have learned a lot of lessons since November and taken many measures, so we are seeing the results now.''
Even so, the automaker has cut deliveries to dealers in China beginning this month, on signs inventory was building up since the end of June on intensifying competition, he said.
Deliveries have outpaced Honda Motor Co. and Toyota Motor Corp. in China this year, as Nissan chases its targets of 8 percent operating margin and global market share.
"In terms of their full-year plan, they are pretty much on track," said Kota Yuzawa, an auto analyst at Goldman Sachs Group Inc. in Tokyo. "Their China sales are quite strong this year."
China sales
In China, where Nissan is the biggest Japanese automaker, sales rose 21 percent in the quarter to 283,000 units, boosted by the X-Trail SUV.
Nissan aims to gain a 10 percent share of the market in China, which accounts for a quarter of the automaker's sales by volume. The company has said it expects to sell more than 1.4 million units in China this year.
The growth in profit was also helped by Nissan's premium Infiniti brand. Deliveries in China more than doubled from a year earlier.
While sales are expanding in China and the United States, Nissan is grappling with startup costs of new plants in emerging markets. The carmaker opened its second plant in Thailand this month and will start production at its fourth plant in China later this year.
