Nissan Profits Buoyed By Strong U.S. Sales, Weaker Yen
Buoyed by stronger U.S. sales driven in part by cheaper prices allowed by the weaker yen, Nissan reported a quarterly profit of ¥82.02 ($818.9 million), beating estimates by about $50 million, up ~$100 million from last year’s quarter (In Nissan’s fiscal year, the second quarter).
After the company cut the retail price of seven models, May sales were up 25%, and the company says that it has resolved supply problems that affected sales in 2012. Pathfinder sales were up more than 300% and Altima sales were up 23% in June. The battery powered Leaf had its second best month in the EV’s history, with 2,235 cars sold. After lowering the price on the Leaf, offering a less expensive entry level version, and increasing the rated range, first half 2013 sales, 9,839, have already exceeded results for all of 2012, and June sales were 4X sales from the same period a year ago.
Analysts say that Nissan’s aggressive pricing strategy has caught the industry’s attention and time will tell if other automakers hold the line of pricing or if we’ll see a price war. While the weak yen primarily affects imports from Japan, it can also affect the cost of cars assembled in the United States because they still use Japanese components. Nissan projects that a weaker yen will increase operating income by $2.25 billion this year.
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Plug-in sales now comprise about 1% of all US auto sales, which is double from last year. Nissan seems like a company that's not afraid to take a chance with its designs (Leaf, GT-R, Juke, Cube). Even if some ideas don't sell well (Cube), they at least keep things interesting. But some models (Maxima, Murano CC) need to go, or receive a serious re-thinking. Despite its product breadth, I suspect Nissan's volume and profits mostly ride on Versas, Sentras, and Altimas.
Price war? Price war! Bring on the price war! The TV commercials screaming DISCOUNT! will shriek like a thousand CVTs.
I've liked quite a bit of their new cars, and I've never been one to think Nissans were attractive. I think the new Altima and Sentra are great looking designs, as is the new Pathfinder, but that did disappoint me as far as interior. The new Versa isn't bad looking, but it's a god awful pile of crap.
The so-called free market and free trade are a joke. The Japanese government's buying down the yen to help it's exporters is contrary to free markets. Some will say all nations manipulate their currency but Japan is the world champion of it to the point they have the highest debt per capita in the world. Libertarian types who reward JapanInc for doing in Japan what they protest in America are hypocrites of a dangerous and dare I say unpatriotic order.