Nissan annual net profit nearly doubles on-year

Nissan says demand is rising at home and in North America, Europe and China. Photo: Yuichi YAMAZAKI / AFP Source: AFP

Nissan said Thursday it nearly doubled its full-year net profit in 2023-24 but forecast a dip of around 10 percent for the current financial year.

The Japanese automaker said demand was rising at home as well as in North America, Europe and China, where it has struggled to compete with fast-growing electric vehicle firms backed by Beijing.

Net profit totalled 426.6 billion yen ($2.7 billion), up 92.3 percent on-year, though Nissan expects that to fall to 380 billion yen in 2024-25.

Operating income rose more than 50 percent on-year, the company said, citing “an increase in sales volume, improved net sales per unit, and disciplined management of fixed costs”.

The weak yen also provided a “short term” boost to profits, CEO Makoto Uchida told reporters.

“But in the mid and long term, whether it’s a strong or weak yen… volatility in forex markets is not very beneficial. It will be a challenge,” he warned.

Thursday’s results struck a different tone to an announcement last month when Nissan trimmed its sales and profit outlook for 2023-24, predicting a more modest net profit of 390 billion.

“The increase in operating profit and net income compared to the April 19 forecast revision is due to the reversal of previously recorded litigation provision,” Nissan explained.

Uchida said this year that Nissan had struggled with sales in the Chinese market, where capacity is “excessive” despite improvement in recent months.

China overtook Japan as the world’s biggest vehicle exporter last year, helped by its global dominance in electric cars as firms such as BYD speed ahead of international rivals.

“How to compete with China in the Asian market is an underlying theme” for Nissan as well as Toyota and Honda, said Satoru Takada, an auto analyst at research and consulting firm TIW.

But Nissan has made it clear “it is not slowing down” on efforts to expand its EV market, Takada told AFP.

Uchida said in March that Nissan was “focused on providing what Chinese customers want” as the firm pledged to slash production costs for next-generation EVs by 30 percent.

Nissan and Honda have said they are exploring a strategic partnership in EVs to face up to a “once-in-a-century” upheaval in the car industry.

Like Honda, Nissan has sent a message that “it is being more and more optimistic about developing solid-state batteries and putting them into use”, Takada said.

But “another focus is how they will manage to offset the rising costs linked to inflation,” he added.