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(Bloomberg) — Nissan Motor Co. forecast a stronger-than-expected operating profit in the current fiscal year on cost cuts and a weak yen, and said car sales from Japan to the US and China should be robust amid new model rollouts.
The Japanese automaker expects an operating profit of ¥600 billion ($3.9 billion) for the year through March 2025, higher than the market’s estimate of ¥580 billion and more than the previous year’s ¥569 billion. The yen’s weakness should boost operating profit by around ¥70 billion, it added in a statement Thursday.
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Nissan also forecast annual global vehicle sales of 3.7 million units, compared with 3.4 million the previous year.
While Nissan cut its sales target multiple times last fiscal year, Chief Executive Officer Makoto Uchida said Thursday that the company plans to avoid doing so this year by in part ensuring strong sales in the US.
“In North America we achieved a 19% gain last year and we want to keep sales strong in the current fiscal year as well by introducing affordable cars,” Uchida said.
Bloomberg analyst Tatsuo Yoshida said that in the US, the key for Nissan will be “whether volume growth can be achieved without an over-reliance on incentives and fleet sales” as competition intensifies. “But we are not optimistic about this,” he said.
Uchida also said that more new-energy models would be introduced in China, where Japanese automakers have been struggling as they face intense competition from local EV players such as BYD Co.
Nissan Chief Financial Officer Stephen Ma said the automaker is hoping for better China sales although “we don’t have a good offering” of electric vehicles in the country.
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Nissan also forecast a dividend of ¥25 or more per share for fiscal 2024, versus ¥20 the previous year. Uchida said he’s aiming to keep the payout high in coming years.
In March, Nissan said it was targeting an additional 1 million of vehicle sales within three years and an operating profit margin of at least 6% through the introduction of new models. It’s also said it wants to reduce the cost of next-generation EVs by 30% and aim for cost parity between electric and combustion-engine vehicles by fiscal 2030.
To help in that regard, Nissan plans to invest more than ¥400 billion in battery capacity and begin rolling out vehicles with solid-state batteries during the fiscal year beginning in April 2028.
Nissan on Thursday kept its foreign exchange level at ¥145 against the dollar, unchanged from last year. However Uchida expressed some concern over the sharp foreign exchange moves, saying yen volatility impacts the company’s strategy and business.
As for a possible alliance with Honda Motor Co. aimed at developing EV technology, Uchida said the companies are holding frank discussions and have set up a team to conduct a detailed study on what the two can achieve. Details should be available “soon,” he said.
(Updates to add executive, analyst comments, context throughout.)
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