Nissan cuts profit forecast in its first report since ousting Carlos Ghosn
Posted February 12, 2019 6:35 a.m. EST
CNN — Life after Carlos Ghosn is off to a rocky start for Nissan.
The Japanese automaker slashed its annual profit and sales forecasts on Tuesday in its first earnings report since the arrest and ouster of Ghosn, who ran the company for nearly two decades.
Nissan now expects to sell 5.6 million vehicles worldwide in the financial year ending in March, down from an earlier forecast of more than 5.9 million. Net profit is likely to come in at 410 billion yen ($3.7 billion), nearly 20% below the previous prediction.
The company blamed the gloomy outlook on difficulties in the United States and Europe, two of its biggest markets. Profits in the most recent quarter were also hit by a charge relating to payments to its former controversial chairman.
Nissan's new leaders have a tough job to turn things around. After an 8% drop in the first three quarters of its financial year, Nissan's sales in the United States plunged 19% in January.
The company is trying to "improve its brand value" and become more competitive in the United States, CEO Hiroto Saikawa said at a news conference Tuesday.
Nissan blamed its lackluster performance in Europe, where sales nosedived 13% in the first nine months of its financial year, on uncertainty surrounding Britain's exit from the European Union and tighter regulations on diesel emissions.
Earlier this month, the company said it had scrapped plans to build a new SUV model at its main British plant, citing Brexit uncertainty as a factor.
Saikawa was more upbeat on Nissan's prospects in China, the world's biggest auto market, which shrank last year for the first time in about two decades. Nissan's Chinese sales fell 3% in 2018.
"China is kind of plateauing or in a lull, but in the long term, the market is going to grow," Saikawa said.
Ghosn scandal dents profit
Nissan's third-quarter results reflected the fallout from the Ghosn scandal.
One of the global auto industry's most prominent figures, Ghosn has been detained by Japanese prosecutors since November 19. They have charged him with understating his income at Nissan by about $80 million between 2010 and 2018, and abusing his position by using the company to help sort out personal investment losses.
Nissan said Tuesday it has booked a charge of 9.2 billion yen ($83 million) related to payments to its former chief.
Ghosn denies the allegations against him, claiming they're the result of "plot and treason" by Nissan executives who opposed his plan to deepen the automaker's integration with its French partner, Renault. Nissan says Ghosn's alleged misconduct is the reason for his downfall.
On Tuesday, Saikawa reaffirmed Nissan's commitment to its long-standing alliance with Renault and Mitsubishi Motors, another Japanese carmaker.
The alliance "is a great asset and has great value," he said. Doing away with it "is not something we're thinking about at all."