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Nissan Shares Drop 6% After Forecast of Flat Profit Growth

Nissan has shifted its focus from “volume to value”, shedding the emphasis on big sales numbers, often at discounts, that it pursued for years


NIssan is evaluating what to do with its EV business.
There is speculation that Renault may cut its controlling stake in Nissan after it said in April that all options were on the table for separating its EV business. Photo: Reuters.

 

The spectre of continuing chip shortages and rising input costs sent Nissan Motor shares down as much as 6% in Tokyo morning trade on Friday.

The Japanese carmaking giant’s forecast for flat profit this year fell short of market expectations.

Nissan has shifted its focus from “volume to value”, shedding the emphasis on big sales numbers, often at discounts, that it pursued for years before the ousting of former boss Carlos Ghosn.

The company is now aiming at higher sales margins while holding down rising input costs amid chip shortages.

On Thursday it reported a fourth-quarter profit but said it expected just 1% growth in operating profit for this year, missing expectations. Shares were down 3.5% in morning trade after earlier sliding 6.3%.

Companies around the world are warning about declining profitability as they cannot fully pass on soaring input costs to consumers and are bracing for more supply chain hold-ups.

Bigger rival Toyota Motor this week said the Ukraine conflict, prolonged pandemic-related lockdowns in China and unprecedented rises in raw material costs could slice a fifth off its full-year profit.

The “uncertain situation” around the supply chain has become a challenge for the industry as manufacturers’ assumptions can be quickly changed by real-time events, Nissan CEO Makoto Uchida said.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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