While America Slept. Monday, February 9th 2009

Nissan sees red: Nissan cut its earnings outlook, saying it now expects a consolidated net loss of 265 billion yen for the year ending March 31, the Nikkei [sub] writes. The automaker earlier forecast a net profit of 160 billion yen, down 67 percent from the previous term. Nissan downgraded its sales outlook to a 23 percent fall. The carmaker also projects an operating loss of 180 billion yen, tumbling into the red for the first time in 14 years, in a sharp reversal from the 270 billion yen profit, down 66 percent. Nissan will cut 20,000 jobs in Japan and abroad by the end of March 2010, bringing the total payroll down to 215,000 employees. This is the first loss since fiscal 1999 when current President Carlos Ghosn became chief operating officer after Nissan formed an alliance with France’s Renault.

India keeps going down: India’s domestic car sales fell for the fourth straight month in January. Sales fell 3.2 percent in January, the Nikkei [sub] reports. They were down 7 percent in December, 19 percent in November, 6.6 percent in October, 4.4 percent in August, and 1.7 percent in July. Only in September 2008, sales rose 2.8 percent.

There’s good loss and bad loss: Now that it’s not embarrassing anymore to book a loss, many Japanese companies book them where they can—to save taxes and to make strategic retreats to be better positioned when the economy recovers. “Starting this week, the stock market is expected to pay close attention to the quality of loss that firms report,” the Nikkei [sub] says. The key metric is loss to equity capital. Amongst carmakers, Mitsubishi Motors definitely is in the “bad loss” corner with an 18.9 percent net loss to equity capital. The ratio for Toyota is only 2.9 percent, putting the firmly in the “good loss” camp, the Nikkei opines.

Not so fast: GM China and FAW Group have postponed announcement of their cooperation details planned for the weekend given that they still have to wait for government approval, Gasgoo says. It just so happens that GM has a big day in DC next week also. The two parties unveiled plans to establish a joint venture for producing light commercial vehicles and said details of the partnership will come out two days later. The announcement is now postponed as it has to go through the process of regulatory approval.

Ford China down: While other car companies reported a good January, Changan Automobile Co, Ford’s passenger car joint venture in China, said that its January sales fell 26.7 percent to 88,971 vehicles from 93,710 a year earlier, Gasgoo reports. Sales of the joint venture had fallen 5.88 percent in 2008.

Vive la bailout: The French government will help PSA and Renault with a €6b loan package at favorable conditions. The price: “All decision making will be the object of thorough governmental scrutiny,” says Les Echos via Das Autohaus. Automakers shall refrain from moving production abroad, from closing factories and layoffs. France wanted them to close their factories in other countries, such as the Czech Republic, instead, but this is incompatible with EU law. Czech Prime Minister Mirek Topolanek characterized the mere thought as ‘unbelievable.’