Nissan cuts operating profit forecast on inspection scandal

November 9, 2017

YOKOHAMA- Nissan Motor Co. said Wednesday that it has revised down its group operating profit forecast for the current fiscal year through March 2018 due to its vehicle inspection scandal.

The Japanese automaker now forecasts an operating profit of 645 billion yen, down 40 billion yen from the previous estimate.

The cut reflected expected recall costs linked to the scandal over the use of unqualified workers in final inspections of finished vehicles.

The automaker kept its sales estimate unchanged at 11.8 trillion yen.

The company also maintained its target of selling 5.83 million vehicles globally. But it is unlikely to achieve its domestic sales target of 595,000 units as it suspended vehicle production and shipments in Japan for weeks due to the scandal.

"I deeply apologize for damaging the public's trust," Nissan President and Chief Executive Officer Hiroto Saikawa told a press conference at the company's headquarters in Yokohama, south of Tokyo. "By making all-out efforts to regain trust, we will recover sales," he said.

Nissan plans to report the results of an investigation into the inspection scandal to the transport ministry next week.

In the April-September first half, Nissan's sales rose 6.2 percent from a year before to 5,652,509 million yen.

But operating profit declined 17 percent to 281,832 million yen, weighed down by some 30 billion yen in costs related to the inspection scandal and about 10 billion yen in payments to settle a US lawsuit over rupture-prone Takata Corp. air bags.

Net profit dropped 2.1 percent to 276,509 million yen.

Releasing an outline of its new midterm business plan, Nissan said it aims to boost annual sales to 16.5 trillion yen in the year ending in March 2023, up about 28 percent from six years before.

The plan also calls for the operating profit margin to be raised to 8 percent from 6.9 percent. The company aims to boost its competitiveness in the fields of electric vehicles and automated driving technologies to achieve those goals. Jiji Press