Nissan: No New Models Led to Drop in Profit

Nissan Motor, one of the top three Asian rivals---- together with Toyota the producer of Lexus brake pads in match with jeep axle and Honda, has recently announced that its profit dropped for the third consecutive quarter due to a decline in the domestic demand. Japan’s third largest automaker has been able to sell fewer light trucks in the US while paying more in taxes.

Nissan’s net income fall by 16 percent to ¥92.3 billion or $765 million for the previous three months this year ended June 30 from ¥110.2 billion a year earlier.

The reason why Nissan sold few vehicles domestically is because of the aging population, add to that the absence of new car models. While the sales of large vehicles fell due to the ever increasing prices of gasoline which reached $3 a gallon.

According to Takashi Aoki, a fund manager at Mizuho Asset Management, "Dropping domestic sales are pulling results down, while a worsening product mix worries me. As only the cheap cars like the Versa and Sentra seem to be selling well."

Last year Nissan’s Chief Executive Officer Carlos Ghosn have scrapped the bonuses that are to be given to top executives including himself since the automaker has failed to reach its target not to mention profit fell for the first time in seven years.

Nissan has also not introduced any new car model in the domestic market for the last 16 months in which on the same period Toyota has introduced 11 new or redesigned models while Honda introduced three. Ghosn said that Nissan need to improve if it wants to remain competitive. He also added that the automaker should released new models on a more regular basis.

Last April, Ghosn has relinquished the supervision of North American operations giving him more time to focus in improving the performance of Nissan and Renault. The French vehicle manufacturer owns 44.3 percent of Nissan.

Three months inclusive June 30, Nissan together with Toyota and Honda has been able to benefit from the 5.3 percent drop in the value of the yen against the dollar. The yen dropped by 11.7 percent against the euro.

The company has also recap its full-year forecast stating that it will introduce 11 new or redesigned vehicles for this fiscal year. It also predicts that its new models will help in boosting net income by 4.2 percent higher than the ¥480 billion forecasted in the 12 months ending next March.

Revenue is also seen to fall by 1.6 percent to ¥10.3 trillion this fiscal year since the total for the earlier year was for 15 months sales in Europe and Mexico according to the company as it changed to accounting to a fiscal year. The carmaker’s operating profit for the quarter has also dropped by 3.2 percent to ¥148.4 billion while vehicle sales increase by 5.9 percent to 875,000.