By on April 28, 2020

Nissan can’t catch a break. Instead of the new decade heralding sunnier skies and calmer seas for a financially compromised Nissan, the first quarter of the year (and counting) brought nothing but grief.

Declining sales and shuttered plants spurred by the coronavirus pandemic further destabilized the automaker’s balance sheet. It was the kind of out-of-the-blue event both beancounters and executives feared, occurring just as the automaker was preparing (hoping?) to exit its present crisis with the help of a new CEO and a new plan.

Clearly, that recovery will have to wait, as analysts are now mentioning 2008 in the same sentence as “Nissan.”

In a notice filed with the Tokyo Stock Exchange on Tuesday, Nissan said it expects to post an annual operating loss for the fiscal year ending March 31st — its first full-year tumble into the red since the Great Recession.

As recently as mid-February, Nissan projected a $796 million operating profit for the 2019 financial year, with a net profit of $609 million. Today, it slashed its predictions, telling the stock exchange it expects to end the fiscal year with a roughly $420 million operating loss.

In a release, Nissan said “the company’s performance has continued to decline, primarily impacted by the COVID-19 pandemic.” (Note the use of the word “primarily.”)

“As a result,” the automaker stated, “Nissan may report a consolidated operating profit that is 120 billion to 130 billion yen lower and net income that is 150 billion yen to 160 billion yen lower than the February 13 forecast.”

The company added that the plunge in net income “does not include the impact of a revision of the company’s midterm plan, which the company is currently assessing.”

As sales plunged around the globe last year, Nissan hurriedly cobbled together a plan to right the ship, outlining five-figure job cuts and culling the number of build configurations of its new models. Its CEO, Hiroto Saikawa, hit the bricks in the fall, replaced by a new leader, Makoto Uchida, who quickly got an earful from U.S. dealers. Uchida made it known that if his plan, expected to be revealed in full next month, doesn’t result in a quick turnaround, he’ll gladly fall on his sword.

Shortly after that pronouncement, the automaker’s earnings report for the fiscal third quarter of 2019 revealed a net loss, and the pandemic took hold outside the confines of China’s borders. Few could have predicted this trial by fire.

“Due to delays in the company’s financial close and audit process caused by the COVID-19 pandemic and lockdowns in several locations, Nissan will delay its announcement on FY19 financial results and revised midterm plan from middle of May to May 28, 2020,” the company said Tuesday.

In the near future, Nissan is expected to retreat from several low-performing markets while maintaining an annual production volume well below that seen in previous years — certainly when compared to the heady Ghosn era. For an altogether different reason, Nissan is said to cut production at its Japanese assembly plants by as much as 70 percent in May, reflecting the reduced demand borne of the coronavirus pandemic.

[Image: Nissan]

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13 Comments on “Bad Timing: Nissan Warns of Full-year Loss After Pandemic Slams Finances...”

  • avatar
    Art Vandelay

    Nissan Death Watch time?

  • avatar
    el scotto

    Could Japan Inc run out of money? Could Nissan be the 1st kieretsu that goes under? Selling all of Nissan to the French might be a smart move in the long run. Meanwhile, Hyundai and Kia are laughing.

    • 0 avatar

      Nissan will not fail.
      Fuchu prison may be a happier place than Nissan after Japan Inc. reforms Nissan. It will be a smaller Nissan. What will be different from the past is labor force in Japan will not be spared.
      Japan’s depth of resolve matches their depth of capital. Don’t expect a repeat of Sharp.
      Nissan and Renault…..this is going to be interesting to watch. Time to make some popcorn and enjoy the show.

    • 0 avatar

      Don’t see why H/K would be laughing as don’t think they take pleasure in seeing a competitor fold and the same economic situation will hit them pretty hard as well (plus, the Japanese auto-maker they have their sights set on is Toyota; Honda isn’t really a competitor in numerous major markets).

      There was someone who stated that Hyundai and Nissan were in prelim talks over Hyundai purchasing Nissan’s truck plant, but if that was indeed the case, doubt that Hyundai has any intention of continuing w/ talks at this juncture (which is more bad news for Nissan).

      The Abe govt. will do everything in its power to save Nissan, as Nissan going under will be a direct reflection on his governing.

  • avatar

    Toyota will buy Mazda and Subaru.
    Close links with history.
    IE- 35% of All Camrys in the USA made between 2008 – 2016 we assy at the Subaru plant in Indiana.

    • 0 avatar

      Toyota already owns around 17% of Subaru and I believe that a total buyout is probably not on the table as Subaru is not suffering as badly financially as other manufacturers. Mazda (larger than Subaru), however, is a “partner” of Toyota only and has been suffering in the US marketplace prior to the current crisis and is probably much more likely to be absorbed by Toyota to allow its survival.

    • 0 avatar

      No. Not going to happen and No.
      Close links with browser history maybe.

  • avatar

    Toyota = the Borg

    they assimilate

  • avatar

    Let’s do brain storm to save Nissan:

    – Japanese Government forces Toyota or Honda to help Nissan and Mitsubishi to survive.
    – Nissan is sold to Chinese company.
    – Nissan applies for small business loans in USA.
    – Carlos is brought back from prison (if they manage to arrest him) to save Nissan in exchange for freedom.
    – Russia buys Nissan and makes it the Government/Ministry of Defence run company.
    – Aliens come and save Nissan.

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