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| Nissan Profit Tumbles as It Struggles to Move Past Management Problems | Nissan Profit Tumbles as It Struggles to Move Past Management Problems |
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| YOKOHAMA, Japan — Nissan, the Japanese automaker lashed by slowing growth abroad and management scandals at home, reported on Tuesday the latest bad news in a very difficult year: Its profit has continued tumbling, and the situation is expected to get worse. | YOKOHAMA, Japan — Nissan, the Japanese automaker lashed by slowing growth abroad and management scandals at home, reported on Tuesday the latest bad news in a very difficult year: Its profit has continued tumbling, and the situation is expected to get worse. |
| The automaker said its net income fell 54.8 percent in the last quarter, to 59 billion yen, or about $540 million, from the same time last year. Its revenue fell by 6.6 percent in the same period. | The automaker said its net income fell 54.8 percent in the last quarter, to 59 billion yen, or about $540 million, from the same time last year. Its revenue fell by 6.6 percent in the same period. |
| Nissan also revised its profit forecast for the fiscal year ending March 2020 down 35 percent, to 110 billion yen. Vehicle sales, too, are expected to trail previous expectations by more than 5 percent, it said. The full-year dividend, which had been projected at 40 yen per share, could be revised, Nissan said, “following internal discussion.” | |
| The results show the long path ahead for Nissan as it tries to simultaneously navigate an industrywide slump in global auto sales and emerge from a damaging series of events that began a year ago with the detention of its former leader, Carlos Ghosn, on suspicion of financial wrongdoing. | |
| Tokyo prosecutors have indicted Mr. Ghosn on four charges, and the company’s chief executive, Hiroto Saikawa, has resigned over his own pay scandal. Sales have plunged, top talent has fled, and the company has begun eliminating 12,500 jobs globally. Mr. Ghosn denies the charges. | |
| The troubles also extend to Nissan’s alliance with the French automaker Renault. Mr. Ghosn’s departure exacerbated deep divisions in the partnership, which includes Mitsubishi and is one of the world’s largest automotive groups, producing more than 10.7 million vehicles in 2018. | The troubles also extend to Nissan’s alliance with the French automaker Renault. Mr. Ghosn’s departure exacerbated deep divisions in the partnership, which includes Mitsubishi and is one of the world’s largest automotive groups, producing more than 10.7 million vehicles in 2018. |
| Renault owns over 43 percent of Nissan, and would suffer financially if the company decides to lower its dividend. | |
| Nissan’s financial results on Tuesday were worse than expected, but not a surprise. In May the company warned investors that its performance would continue to worsen during the coming year, with net profit expected to hit “rock bottom” by March 2020. | |
| In part, the company has fallen victim to slackening global demand for automobiles, particularly in the United States, Nissan’s largest market, and in Europe. Overall sales declined 6.6 percent in the second quarter, compared with the same period a year earlier, the company said, with a more than 5 percent drop in North America. | |
| The worsening economic conditions have also hit Nissan’s alliance partners. Renault’s revenues dropped 6.4 percent in the first half of 2019, compared with the same period a year earlier, and operating profit fell 11.8 percent. At Mitsubishi, profit plummeted 95 percent during the first half of its fiscal year. | |
| Nissan’s decision | |
| But some of Nissan’s problems are self-inflicted. Under Mr. Ghosn, the company focused on expanding its share of the American market by aggressively discounting its vehicles and increasing fleet sales — a strategy that rankled dealers and, Nissan now says, undermined its brand. | |
| Nissan has also failed to develop vehicles that appeal to the changing tastes of American consumers, who are more interested in trucks and sport utility vehicles than Nissan’s staid sedans. And while the company has sought to address those problems, its upper ranks have spent much of the last year consumed with battles to fill the power vacuum created by Mr. Ghosn’s ouster. | |
| Now, “unlike in the past, we’re not chasing market share. We’re not chasing volume,” the company’s chief financial officer, Stephen Ma, told reporters at a news conference at the company’s headquarters in Yokohama. | |
| “The most important thing for us right now is business fundamentals in the U.S.,” he said, adding that he expected the company to see improvements in the market in the coming months. | |
| The change is part of the company’s broader efforts to make a fresh start. Mr. Saikawa, who headed Nissan through most of the last year, resigned in September after a unanimous vote by the company’s board of directors. His ouster came in response to his admission that he had received $440,000 in improper compensation. Revelations of improper payments to other top executives, including two of the key players in Mr. Ghosn’s fall, quickly followed | |
| Weeks later, the company retooled its senior leadership, appointing the former head of its China division, Makoto Uchida, as the new chief executive. | |
| Mr. Uchida will officially take Nissan’s reins in December. |