Nissan predicts surprise drop in annual profit

Bloomberg

Nissan Motor Co. forecast a surprise drop in annual profit on expectations for higher raw material costs and a stronger yen, and as price competition increases in the US and China.
Operating profit will probably fall 7.7 percent to 685 billion yen ($6 billion) in the fiscal year through March, compared with the average analysts’ estimate for a gain to 775.4 billion yen, the Yokohama, Japan-based company said in a statement on Thursday. While deliveries in China are projected to increase, vehicle sales in the US are expected to be flat.
Hiroto Saikawa, who succeeded Carlos Ghosn as chief executive officer from April, takes over a Nissan that has boosted annual sales by about 33 percent since 2011 and improved its brand value by almost 50 places in rankings by marketing consultant Interbrand. Saikawa will be seeking to push the company further as Ghosn focuses on wringing synergies from its alliance with Renault SA and Mitsubishi Motors Corp.
“How to enhance brand value will be the foundation for the mid-term competitiveness of the company, to enable the company to sustain profitability and grow,” Saikawa said in his first earnings briefing as CEO. “We did make progress in this area, but we have not yet been able to maximize the brand value of Nissan.”

MID-TERM GOAL
Nissan boosted its global market share to 6.1 percent from 5.8 percent during the six-year period and maintained an aim to achieve an operating profit margin of 8 percent in the
next mid-term plan. The automaker’s performance in China will be key to achieving its global market share
goal with Nissan enhancing its Venucia brand in the world’s biggest auto
market to stave off competition from local brands, Saikawa said in Yokohama on Thursday.
The company also said it aims to raise revenue to 16.5 trillion yen in the next six years, up from 11.7 trillion yen in the year ended in March.