Nissan profits fall on sagging Japan sales, strong yen

TOKYO, Nov 7, (AFP) – Nissan on Monday blamed a stubbornly strong yen and weak sales at home for shrinking its bottom line, despite selling more cars in the US and top vehicle market China.The Japanese automaker said its net profit during the April-September period fell 13.3 percent to 282.4 billion yen ($2.7 billion), the first decline over that six-month span in four years.

Operating profit and revenue were off 14.0 percent and 10.3 percent from a year ago, the company said but kept its annual outlook unchanged.The Altima sedan maker’s results in Japan took a hit as it suspended sales of certain small vehicles linked to a mileage-cheating scandal at smaller rival Mitsubishi Motors.

Japanese automakers, including Nissan rivals Toyota and Honda, have complained about the yen’s sharp rally this year, as it shrinks the value of their repatriated profits while increasing the cost of their products overseas.

Nissan said it moved 2.6 million vehicles globally in its fiscal half year, edging down 0.1 percent from the same period in 2015.The all-important North American market recorded 1.0 million vehicle sales, up 5.4 percent, while unit sales in China rose 3.8 percent to 610,000 automobiles, it said.

But sales in Europe and Russia fell, while they tumbled 20.2 percent to 211,000 units in home market Japan, it warned.”The yen’s strength remains a major factor squeezing earnings in the Japanese auto sector,” said Shigeru Matsumura, analyst at SMBC Friend Research Center before the results were published.

“Japanese carmakers need to make further efforts to make their corporate structure more resistant to the yen’s appreciation,” he added.Despite the half-year decline, Nissan said it still expected a net profit of 525 billion yen in the year through March 2017 with operating profit of 710 billion yen and sales of 11.8 trillion yen.