Nissan Sales Drop, Profit Down First Time In Seven Years

Nissan Motor Co., Ltd. posted results for a fiscal year that saw sales drop in many markets, contributing a drop in annual profit for the first time in seven years. The results, ending March 31 this year, also threw cold water on Nissan's Value Up plan, a three-year plan launched in 2004.

Last year, Nissan's global sales were 3,483,000 units--down 2.4%. In the U.S., sales were at 1,035,000 units--down 4.0%. In Japan, sales were at 740,000 units, down 12.1%. In Europe, sales came to 540,000 units, down by 0.2%. Nissan sold 111,119 units in the U.S. in March--a 3.9% increase from the prior year.

Nissan's profit dropped 54% in the first quarter this year. Nissan's net profit was $595 million, down from ¥152.4 billion--partly because of layoffs this year, higher raw material costs and tax burdens.

The company reported that quarterly sales rose 7% to ¥2.8 trillion ($23.6 billion) from ¥2.6 trillion the previous year.

The results are the first major drop in numbers since CEO Carlos Ghosn took the reins of Nissan in 1999, when the struggling automaker inked a deal with Renault, which owns 44% of Nissan. Ghosn helped turn the company around with new products, a strategy of self-determination, supplier discipline, a series of strict turnaround plans and a renewed focus on the needs of the U.S. market.



Value Up, the most recent financial plan for Nissan, included a goal of reaching annual global sales of 4.2 million units by the end of fiscal year 2007 and maintaining an operating profit margin at the top level among global automakers and a minimum 20% return on invested capital. Ghosn says Nissan will extend the window to achieve those goals by a year.

In March, Ghosn announced he would take supervision of Nissan's treasury department and give up leadership of Nissan's management committee for the Americas.

"Two thousand six did not boost our results towards achieving the objectives of Nissan Value-Up," said Ghosn in a release.

Ghosn says 2007 will be better, with Nissan launching 11 new products globally, including the Infiniti G37 coupe, Rogue, GT-R, Infiniti EX luxury crossover, Murano and a single-cab version of the Frontier-Navara pickup truck.

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