Nissan announced its financial result for the 12 month period ending March 31, 2019. In FY2019, Nissan has reported several unfavourable global business climates and incurred short-term costs due to its initiatives to improve quality of sales in the U.S., as well as the implementation of a warranty extension campaign covering certain vehicles.
Based on the factors outlined above Nissan reported an operating profit of 318.2 billion yen for the full year on net revenues of 11.57 trillion yen (Rs 742,689 crore), equivalent to an operating margin of 2.7 percent. Full-year net income decreased by 57.3 percent to 319.1 billion yen (Rs 20,470 crore). In fiscal year 2018, global unit sales of Nissan fell by 4.4 percent to 5.516 million units.
China and Japan drive Nissan’s sales growth
Nissan’s sales in Japan (including minivehicles) rose by 2.1 percent to 596,000 units. This increase was driven by strong demand for the Note compact car and the Serena minivan, which feature Nissan Intelligent Mobility by offering technologies such as e-POWER and ProPILOT. The Note is said to be the top-selling registered vehicle in Japan in fiscal year 2018, while the Serena led the minivan segment.
In China, where the company’s results are calculated on a calendar-year basis, strong performances by the new Kicks, X-Trail and Sylphy is said to have led to a 2.9 percent increase in Nissan’s unit sales increased to 1.564 million units, equivalent to a market share of 5.9 percent. In the U.S., Nissan’s unit sales fell by 9.3 percent to 1.4 million units, equivalent to a market share of 8.4 percent. Nissan sales in Europe, excluding Russia, fell by 17.8 percent to 536,000 units, which resulted in a market share of 3 percent unit sales in Russia, however, rose by 2.6 percent to 107,400 units. In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales fell by 0.4 percent to 815,000 units.
Strengthening the US base and improving brand value
The company expects to sell 5.54 million units in fiscal year 2019, a small increase over fiscal year 2018. Nissan’s management is focusing its efforts on building an operational base that can ensure consistent and steady profitability over the medium term. Key initiatives include reinforcing the company’s U.S. operations and improving the efficiency of the company’s global investments and operations, while enhancing brand value through the launch of new models that embody Nissan Intelligent Mobility.
Fiscal year 2019 marks the start of these initiatives, and the company expects that the delivery of substantial improvements in performance will not be immediate.