Nissan predicts second consecutive annual loss due to plunging sales
Deferring its product launches and growth plans for conserving cash, Nissan Motor Co., which lost $2.4 billion loss in the fourth quarter, has predicted its second consecutive annual loss, which it fears will be the worst US auto market has seen in nearly three decades!
Saying that a stronger yen would erode overseas sales and widen the operating loss by 170 billion yen, the Tokyo, Japan-based carmaker added that the projected loss may total $1.7 billion for the twelve-month period ending in March, largely due to plunging sales in the US.
The third-ranking carmaker in Japan lacks adequate funds to offer substantial competition to its domestic rivals - Toyota Motor Corp and Honda Motor Co - and, as such, has had to postpone manufacturing projects and new models.
With Nissan CEO Carlos Ghosn intending 20,000 job-cuts this fiscal year, Hitoshi Yamamoto, CEO of Fortis Asset Management Japan Co, said: "Ghosn needs to step up cost reductions. The recovery for Japanese automakers depends on the US, as their reliance on it is still too big."
In fact, in its attempt to break down barriers in favor of cooperation in the tough competitive scenario, Nissan is considering a vehicle-supply deal with Chrysler. In addition, the company may also join a project with US retailer Penske Automotive Group Inc. and GM's Saturn car brand.