COVID-19 pandemic, global chip shortage, and several other factors are pushing Nissan Motor Co’s business. As a result, Nissan had no choice but to report on unfortunate loss for the previous business year. Still, the Japan-based automaker expects to break even this business year.
Quoted from Reuters, Chief Executive Makoto Uchida upon an online earnings call explained, “The fiscal year 2020 was a year dominated by the COVID-19 pandemic and impacted by multiple factors including growth of environmental awareness and political as well as economic changes”.
“If we look at the immediate challenges today, there is a big impact from business risks like semiconductor and commodity price hikes… so at this point in time, we are foreseeing operating profit coming out even,” Uchida said, adding that Nissan will give updates on its outlook guidance after the first quarter.
Due to the global chip shortage, Nissan had to cut around 130,000 vehicles produced in the year just ended. Chief Operating Officer Ashwani Gupta, however, said that the company managed to recover half of that production. The shortage, though, will likely affect Nissan’s first-quarter result. The production of 500,000 vehicles set for this year might face some obstacles as well. Nissan executives further added that the company is hoping for a recovery of at least half of the affected products in the second half of the year.
Nissan records over 100 billion profit loss
On Tuesday, Nissan reported its annual operating loss for the year ended March 31. According to Reuters, Nissan faced a 150.65 billion yen bigger loss from a 40 billion yen shortfall in the year prior.
Still, Nissan managed to exceed its February forecast with a 205 billion yen loss. Cost-cutting and sales recovery, partially in China and the United States helped Nissan to achieve the figure.
To balance the loss, Nissan aims at around 4.4 million vehicles sales for the current business year. The number goes a little over the 4.052 million recorded in the previous 12 months. Though, a comparably low number compared to the 4.9 million sales from two years prior.
Upon the matter, Gupta said, “Despite headwinds, we have reduced our losses more than we forecasted due to accelerated transformation focused on rationalization and quality of sales while enhancing investments in new products and technologies.”
Read also: Chip Shortage, Japan Automakers Alert Profit Drop
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