|Nissan cuts profit outlook as recalls add to costs||| Print ||
|Written by ELAINE KURTENBACH, AP Business Writer|
|Friday, 01 November 2013 06:39|
TOKYO (AP) — Nissan Motor Co., Japan's second-biggest automaker, cut its earnings forecast Friday to reflect tougher than expected conditions in many markets and expensive recalls.
The company posted a 107.8 billion yen ($1.1 billion) net profit for the July-September quarter, a meager 2 percent increase from 105.7 billion yen a year earlier. Quarterly sales rose 16 percent to 2.5 trillion yen ($25.4 billion).
"We had very costly recalls that hit our earnings," Nissan President and Chief Executive Carlos Ghosn said in a video statement.
The company cut its profit forecast for the full fiscal year ending March by 15.5 percent to 355 billion yen ($3.6 billion).
Nissan said last week it was recalling more than 188,000 Nissan and Infiniti SUVs worldwide to fix faulty brake control software that could increase the risk of a crash. In September, it recalled 908,900 vehicles around the world for defective accelerator sensors that could cause engines to stall.
Weaker than expected sales in Russia, Australia, Indonesia, Thailand and Brazil also took a toll, Ghosn said, though Nissan did well in China despite slowing growth in that market.
Nissan was stretched, with nine plants in construction or expansion at the same time, he said.
"A little bit of the bad news, we could overcome. Too much of the bad news, impossible," he said.
Still, Ghosn was confident about the automaker's capacity to respond to its recent hardships in the longer term.
The company, allied with Renault of France, will begin making cars in Brazil in 2014, helping to reduce costs from tariffs imposed on its vehicles imported from Mexico.
Nissan also announced Friday a management reshuffle that will make its chief operating officer, Toshiyuki Shiga, a vice chairman and appoint three other executives as COOs.
Nissan's half-year profit rose 6.8 percent to 189.8 billion yen ($1.9 billion) from 177.7 billion yen a year earlier.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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