Nissan posts loss amid pandemic and financial scandal

A visitor walks past a car at Nissan showroom in Tokyo (Koji Sasahara/AP)
A visitor walks past a car at Nissan showroom in Tokyo (Koji Sasahara/AP) (AP)
10:58am, Thu 12 Nov 2020
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Nissan posted a loss of 44.4 billion yen (421 million US dollars/£319m) in the last quarter as the pandemic slammed profitability and the Japanese carmaker fought to restore a brand image tarnished by a scandal centred on its former star executive Carlos Ghosn.

Nissan Motor Co had a profit of 59 billion yen in July-September of 2019.

Yokohama-based Nissan reported its quarterly sales dipped to 1.9 trillion yen (18 billion US dollars) from 2.6 trillion yen a year earlier.

Nissan officials said its global sales are expected to recover to pre-pandemic levels by December, if improvements continue at the current pace.

Chief executive Makoto Uchida promised the company will work hard to recover and become “a trusted company”, delivering products that will be praised as “Nissan-like”.

A section of Nissan’s earnings report addressed the Ghosn case.

A woman walks past the corporate logo at Nissan Motor Co.’s global headquarters in Yokohama (Koji Sasahara/AP) (AP)

Former Nissan executive Greg Kelly is standing trial in Tokyo District Court on allegations of violating the Financial Instruments and Exchange Act in not fully disclosing Ghosn’s compensation.

Ghosn, who says he is innocent, jumped bail and fled to Lebanon, which has no extradition treaty with Japan.

Kelly also says he is innocent.

Nissan, as a company, is not fighting the criminal charges and has paid an administrative penalty of 1.4 billion yen (13 million US dollars).

The company reiterated on Thursday that it took what happened seriously and has taken steps to improve governance.

In its report, Nissan accused Ghosn of misusing company assets for personal use, such as spending 27 million US dollars of company funds to buy homes in Beirut and Rio de Janeiro, improper use of the company jet and donating two million US dollars to universities in Lebanon.

Nissan is suing Ghosn, demanding 10 billion yen (95 million US dollars) in damages.

The company is still bleeding red ink and expects a 615 billion yen (5.8 billion US dollars) loss for this fiscal year, which ends in March.

That is still an improvement over its earlier projection for a 670 billion yen loss (6.4 billion US dollars).

A general view of the Nissan Factory in Sunderland (Owen Humphreys/PA) (PA Archive)

Nissan posted a 671 billion yen loss in the previous fiscal year.

The maker of the Leaf electric car and Infiniti luxury models raised its fiscal year sales forecast to 7.9 trillion yen (75 billion US dollars), better than its earlier projection for 7.8 trillion yen (74 billion US dollars).

Nissan said it is carrying out cost cuts; its new Rogue crossover is doing well in the US market and it remains a leader in electric vehicles.

“We will maintain the momentum from the second quarter with further financial discipline and improvement in our quality of sales,” Mr Uchida said, while stressing uncertainties remained because of the pandemic.

Mr Uchida acknowledged global vehicle sales are bound to decline because of the pandemic.

The latest forecast says Nissan expects to sell 4.17 million vehicles for the fiscal year, down from 4.9 million vehicles a year earlier.

The latest projection marks a 1% improvement from an earlier forecast.

Nissan said it is sticking to its plan to launch 12 new models, including a new compact car in Japan.

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