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Nissan Narrows Loss Forecast as Government Support Boosts Sales in Asia

Nov 4, 2009 @ 01:16 AM, Business, Kiyori Ueno And Tetsuya Komatsu

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Nov. 4 (Bloomberg) -- Nissan Motor Co., Japan’s third-largest carmaker, narrowed its full-year loss forecast asgovernment subsidies boosted vehicle demand.

The company expects a 40 billion yen ($442 million) netloss in the year ending March 31, compared with a previousforecast of a 170 billion yen loss, it said in a statement today.Nissan raised its sales outlook to 7 trillion yen from 6.95trillion yen.

Nissan increased its sales projections in China, the U.S.and Europe as a global economic recovery fueled by stimulusprograms revives demand for automobiles. The carmaker expects tosell 712,000 vehicles in China this fiscal year, up from anearlier forecast of 570,000.

“China is becoming vital for Nissan,” said Koji Endo,Managing Director at Advanced Research Japan Co., a Tokyo-basedequity research firm. “Government stimulus programs have alsoworked better than Nissan expected.”

Nationwide vehicle sales in the world’s most populouscountry may rise 28 percent to 12 million this year, based on agovernment forecast that shows China may surpass the U.S. as theworld’s largest auto market.

Nissan increased its sales in China 28 percent to 188,000vehicles in the three months ended Sept. 30. The maker of Altimasedans estimates it will sell 3.3 million vehicles globally inthe year ending March 31, up from a previous forecast of 3.08million.

Quarterly Profit Falls

The company raised its sales forecast for the U.S. to765,000 vehicles from 750,000 and boosted its outlook for Europeto 468,000 from 400,000.

Honda Motor Co., Japan’s second-largest automaker, almosttripled its profit forecast last month on demand in Asia. ToyotaMotor Corp., the world’s biggest carmaker, will report second-quarter results tomorrow.

Nissan rose 1.7 percent to close at 661 yen in Tokyotrading today, before the earnings announcement. The shares havegained 107 percent this year, compared with Honda’s 50 percentincrease and Toyota’s 24 percent rise.

Nissan’s second-quarter net income fell to 25.5 billion yenfrom 73.5 billion yen a year earlier. The company’s U.S. salesfell 24 percent in the first 10 months of this year as driverscut spending amid rising unemployment and falling wages.

The yen averaged 13 percent stronger against the dollarlast quarter than a year earlier. The stronger Japanese currencycut Nissan’s first-half operating performance by 142.7 billionyen, Nissan said today.

The yen averaged 93.58 against the dollar in the quarter.

To contact the reporters on this story:Kiyori Ueno in Tokyo at kueno2@bloomberg.net;Tetsuya Komatsu in Tokyo at tekomatsu@bloomberg.net

Last Updated: November 4, 2009 03:17 EST

Source: Bloomberg


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