Nissan's global profits are getting killed by its US dealerships
07-26-24, 01:55 PM
#1
Lead Lap
Thread Starter
Nissan's global profits are getting killed by its US dealerships
I figured it was bad but this beyond imagination.
Nissan profit wiped out by US discounts; shares hammered
TOKYO, July 25 (Reuters) - Japan's Nissan Motor slashed its annual outlook on Thursday after deep discounting in the United States almost completely wiped out the automaker's first-quarter profit.
The figures confounded the expectations of analysts who saw profit exceeding last year's, sending Nissan stock plunging 7%.
Investors now have to worry about Nissan's prospects in the United States, a fresh concern for an automaker already fighting to turn around its fortunes in another critical market, China.
Operating profit for April-June totalled 995 million yen ($6.5 million) versus 128.6 billion yen in the same period a year earlier. The result was just a sliver of the 164.4 billion yen average of five analyst estimates compiled by LSEG.
"The first quarter was a very tough one for Nissan," Chief Executive Makoto Uchida told an earnings briefing. "However, we'll recover our performance by taking clear measures to address the challenges and launching new models."
The automaker is "optimising inventory buildup" in the U.S. and will focus on the quality of sales, he said. It plans to bolster sales by offering new and refreshed models such as the Armada and Murano SUVs in the second half of the financial year.
Having endured its worst quarterly performance in over three years, the automaker cut its operating profit forecast for the financial year by 17% to 500 billion yen.
The figures confounded the expectations of analysts who saw profit exceeding last year's, sending Nissan stock plunging 7%.
Investors now have to worry about Nissan's prospects in the United States, a fresh concern for an automaker already fighting to turn around its fortunes in another critical market, China.
Operating profit for April-June totalled 995 million yen ($6.5 million) versus 128.6 billion yen in the same period a year earlier. The result was just a sliver of the 164.4 billion yen average of five analyst estimates compiled by LSEG.
"The first quarter was a very tough one for Nissan," Chief Executive Makoto Uchida told an earnings briefing. "However, we'll recover our performance by taking clear measures to address the challenges and launching new models."
The automaker is "optimising inventory buildup" in the U.S. and will focus on the quality of sales, he said. It plans to bolster sales by offering new and refreshed models such as the Armada and Murano SUVs in the second half of the financial year.
Having endured its worst quarterly performance in over three years, the automaker cut its operating profit forecast for the financial year by 17% to 500 billion yen.
07-26-24, 03:07 PM
#3
Lead Lap
Thread Starter
Nissan said U.S. sales were hurt by an ageing portfolio and a market shift to hybrid vehicles.
07-26-24, 03:11 PM
#4
They need another Ghosn-like miracle to turn this around. Nissan will be competing with Mitsubishi in a couple years.
@GS69 posted Nissan's latest results in the sales thread. Frontier was the only bright spot.
Infiniti US sales in 2017: 153,415
Infiniti US sales in 2023: 64,699
They have a new QX80 coming out but who cares.
@GS69 posted Nissan's latest results in the sales thread. Frontier was the only bright spot.
Infiniti US sales in 2017: 153,415
Infiniti US sales in 2023: 64,699
They have a new QX80 coming out but who cares.
07-26-24, 03:16 PM
#6
Lead Lap
Thread Starter
07-26-24, 03:40 PM
#7
Lexus Fanatic
Ghosn may have forestalled a bankruptcy, at least on paper, but, in doing so, IMO at least, ruined most of the vehicles themselves. There was a big difference between the 1990s Nissan products vs. the 2000s and 2010s....particularly the Altima.
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07-26-24, 04:02 PM
#8
Ghosn led a stunning turn around to profitability starting in 1999. Nissan/Infiniti made their best, most competitive vehicles in the 2000's and early 2010's.
07-26-24, 05:42 PM
#9
Lexus Fanatic
Ghosn led a stunning turn around to profitability starting in 1999. Nissan/Infiniti made their best, most competitive vehicles in the 2000's and early 2010's.
07-27-24, 12:01 PM
#10
Lexus Test Driver
Well if they didn’t have to sink BILLIONS of dollars in dumb cars like the Ariya - They could have invested that $$$ more wisely to improve their old models that are no longer competitive.
This goes for all the automakers - that why we see so much cost cutting in new cars even high end ones like current Sclass.
This goes for all the automakers - that why we see so much cost cutting in new cars even high end ones like current Sclass.
07-27-24, 02:57 PM
#11
Lexus Fanatic
Irrespective of what I said above in my reply to LH1, not all of the Ghosn-Era Nissans were necessarily bad products or a waste of money. The Skyline GT-R set a number of performance records for vehicles in its class, and the small, inexpensive all-electric Leaf gave the company an affordable alternative in an era when the typical electric BEVs (especially the Teslas) were priced higher than many customers could afford.
07-27-24, 04:12 PM
#12
Lexus Fanatic
Its a business, so products not being "money makers" is a big problem.
With all due respect, I strongly disagree. I remember the excellent Nissan products of the 1990s very well. I was very impressed with them, and almost bought one or two of them.
07-27-24, 06:27 PM
#13
Lexus Fanatic
That's true to some extent, but the question also comes up (and I don't necessarily know the answer to it) if the money loss was simply from the vehicles themselves, of if it was from other factors, businesses expenses, and the vehicles just got the blame. A company as large as Nissan, a world-wide manufacturer, can lose money from a number of different sources. I'll admit, though, that their vehicles back in the 90s, unlike the ones that followed, did not use cheap materials.
Well, Two things. First, it CAN help pay the bills in some cases, if you refer customers or if customers buy the product on your recommendation. One of my neighbors, for instance, bought a new Altima back then on my recommendation...and loved it. Second, I did a LOT of test-drives back then, and I obviously couldn't take all of them home. I did take home a new Outback, Buick Verano, and Lexus IS300 based at least partly on my own favorable review and test-drive.
Almost doesn't pay the bills lol
07-27-24, 07:03 PM
#14
Lexus Fanatic
What pays the bills is selling cars that are profitable.
07-27-24, 07:30 PM
#15
Lexus Fanatic
Companies often sell vehicles that are unprofitable, yet have no real problem to their finances. The popular Toyota Prius itself was one of them.....Toyota lost money for years on each one selling them, yet was never in any serious financial trouble, even with big lawsuit-payouts over issues like the 3.0 V6 engine-sludge and the runaway-acceleration problems with the throttle/floor mats.