The FINANCIAL — Nissan Motor Co., Ltd. today announced financial results for the three months ended June 30, 2020, and the outlook for fiscal year 2020. In the first quarter of the fiscal year, global industrywide auto sales fell by almost half amid the COVID-19 pandemic. Global total industry volume in the first quarter fell 44.5% from a year earlier to 12.49 million vehicles. Also, Nissan Motor and Nissan Motorsports International have decided to cancel this year’s NISMO Festival.
Nissan said on Tuesday that it expected to make an annual operating loss of $4.5 billion in fiscal year 2020 as the coronavirus pandemic puts pressure on its attempts to reboot its struggling business. The announcement came as the Japanese automaker reported its results for the three-month period that ended in June. Operating profit during the period, when much of the world’s economies were in lockdown to prevent the spread of the virus, plunged $1.46 billion compared with the same period a year ago, with automobile sales dropping by nearly 48 percent, The New York Times reported.
In the first quarter of the fiscal year, global industrywide auto sales fell by almost half amid the COVID-19 pandemic, impacting Nissan’s sales significantly. To limit the spread of COVID-19, the company suspended production at manufacturing sites around the world. Nissan’s plants have since resumed operations but face reduced utilization of their capacity due to lower sales. The company’s performance continues to be impacted by the challenging business climate.
For the April-June period, consolidated net revenue was 1.1742 trillion yen. The operating loss was 153.9 billion yen, equivalent to an operating margin of -13.1%. The net loss was 285.6 billion yen.
For the first quarter, automotive net cash was 235.2 billion yen, a lower level than at the end of March. However, in June and July, Nissan secured an additional 182.4 billion yen of funds in response to the COVID-19 pandemic. Nissan also issued 70 billion yen in corporate bonds and maintains cash on hand of more than 1.2 trillion yen. The company’s committed credit line remains unused.
The carmaker is struggling to restore profitability and sales after the November 2018 arrest of its former Chairman Carlos Ghosn and because a lack of new models left it ill-prepared to face a downturn in global vehicle demand amid the coronavirus pandemic. After announcing its biggest loss in 20 years for the business year that ended March, Nissan unveiled plans to cut ¥300 billion in fixed costs, close production lines and slash capacity by 20 percent, The Japan Times wrote.
Global total industry volume in the first quarter fell 44.5% from a year earlier to 12.49 million vehicles. Nissan’s global sales declined 47.7% to 643,000 vehicles. The company’s global market share fell 0.3 points from a year earlier to 5.2%.
In Japan, Nissan’s sales decreased 33.7% to 84,000 vehicles. Meanwhile, the company’s market share rose to more than 11%, driven by sales of the new Nissan Roox “wagon-type” kei car, which started in March. The company expects to maintain a strong market share in Japan with the addition of the new Nissan Kicks, launched in June.
In China, where Nissan reports figures on a calendar-year basis, sales fell 39.9% in the January-March period to 207,000 vehicles. At the same time, Nissan’s market share in China increased 0.5 points to 6.2%. A steady recovery from April to June is seen with a sales growth of about 4% year-on-year.
In the U.S., Nissan’s sales declined 49.5% to 177,000 vehicles. The all-new Rogue will be on sale from this fall, leading Nissan’s renewal of core models in the U.S. market. The company is continuing to improve the quality of sales in the market, with a focus on retail.
Last week, it was announced that Nissan Motor Co., Ltd. and Nissan Motorsports International Co., Ltd. have decided to cancel this year’s NISMO Festival. The 23rd NISMO Festival, an annual fan appreciation event, was scheduled to take place Dec. 6 at Japan’s Fuji Speedway. The decision to cancel this year’s festival was made to prevent the spread of COVID-19 and protect the health and safety of fans, participating teams, exhibitors, and Nissan and NISMO employees.
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