Nissan pulled off an even bigger miracle than Toyota and ended a (this time truly) catastrophic year with a big profit. Today in Yokohama, Nissan CEO Carlos Ghosn announced that Nissan delivered a pre-tax profit of 535.1 billion yen (US $6.76 billion) for the fiscal year that ended on March 31, “despite natural disasters and currency exchange headwinds.”
Japan’s second largest car company produced the largest profit, exceeding that of Toyota, which had announced a 432.9 billion yen ($5.4 billion) profit before taxes on Wednesday. At the end of last year it was already evident that Nissan had survived that truly catastrophic year best. Today, that fact was confirmed by a beauty of a balance sheet.
When asked what risks are in front of Nissan, Ghosn answered: “The biggest risk is the strength of the yen.” Ghosn is the designated hitter of the Japanese auto industry when it comes to the Yen. He can say what Japanese colleagues would love, but don’t dare to say.
At each quarterly results conference, a reporter of the Nikkei needles Toyota with the question when the company would finally produce a profit at its factories in Japan, instead of offsetting homemade losses with foreign gains. Toyota usually gives a polite non-answer.
“We have healthy profits this year, but all the profits come from international operations. When you take a look to the non-consolidated results in Japan, they are negative. The reason they are negative is because of the strength of the yen. We are protecting ourselves by using as much international capacity as possible and by holding the exports from Japan to the minimum level.”
Just about every car that is exported from Japan is exported at a loss. Instead of paying taxes on income at home, Japanese carmakers pay the price for the abnormally strong yen, Nevertheless, Nissan expects for the new fiscal a pre-tax profit for 680 billion yen ($8.5 billion) on sales of 5.5 million units for Nissan only.