Nissan cuts annual operating profit forecast after scandal

 08 Nov 2017 - 11:05

Nissan cuts annual operating profit forecast after scandal

AFP

Tokyo: Japanese car giant Nissan on Wednesday downgraded its annual operating profit forecast after a damaging inspection scandal in its home market Japan.

The auto giant said it now expects an operating profit of 645 billion yen ($5.7 billion) for the year to March, a cut from the previous forecast of 685 billion yen.

It left its forecast for net profit unchanged at 535 billion yen and sales at 11.8 trillion yen.

Before presenting the figures to journalists, Nissan chief executive Hiroto Saikawa bowed long and deep in apology.

"I would like to express my apologies to customers, partners, dealers and all the people who have been supporting Nissan," said Saikawa.

The scandal has "undermined the trust of all of you", he said, adding: "We would like to do our best to regain the trust of all of you."

Last month, Nissan said it was recalling some 1.2 million cars in Japan that had failed to meet domestic rules on final vehicle inspections.

The company confirmed that tests were performed by staff who were not certified to check the vehicles to Japanese government standards.

The automaker suspended all domestic production for a few weeks before resuming earlier this week, sending its passenger car sales plummeting more than 55 percent in Japan in October.

"Considering the impact from the inspection issue-related costs in Japan and the pace of progress in our cost-cutting efforts, we are revising down our operating profit forecast," the maker of the Altima sedan said in a statement.

Excluding the impact from the inspection scandal in Japan and costs linked to litigation in the US, its operating profit was "in line with our initial forecast", it said.

For April-September, Nissan's net profit edged down 2.1 percent year-on-year to 276.51 billion yen while operating profit dropped 17.0 percent to 281.83 billion yen.

Sales rose 6.2 percent to 5.652 trillion yen as the number of cars sold globally edged up 4.6 percent to 2.73 million vehicles.

In Japan, it sold 283,000 vehicles over the period, up 34.1 percent, it said.

The firm's shares were down 0.32 percent in afternoon trade.