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Nissan shares slide after flat full-year outlook

Nissan shares slide after flat full-year outlook

The logo of Nissan Motor Corp. is displayed the company's showroom in Tokyo, Japan, Nov 11, 2020. (File photo: REUTERS/Issei Kato)

TOKYO: Shares of Nissan Motor fell as much as 6 per cent in morning trade on Friday (May 13), after its forecast for flat profit this year fell short of market expectations and as the chip shortage and rising costs cast a shadow on the Japanese automaker's turnaround.

Nissan has shifted its focus from "volume to value", shedding the emphasis on big sales numbers, often at discounts, that it pursued for years before the ouster of former boss Carlos Ghosn. The company is now aiming at higher sales margins while holding down costs.

On Thursday it reported swinging to a fourth-quarter profit but said it expected just 1 per cent growth in operating profit for this year, missing expectations.

Shares were down 3.5 per cent in morning trade after earlier sliding 6.3 per cent.

Companies around the world are warning about declining profitability as they cannot fully pass on soaring input costs to consumers and are bracing for more supply chain hold-ups following the Ukraine conflict and prolonged COVID-19 lockdowns in China.

Bigger rival Toyota Motor this week said unprecedented rises in raw material costs could slice a fifth off its full-year profit.

The supply chain has become a challenge for the industry as manufacturers' assumptions can be quickly changed by real-time events, Nissan chief executive officer Makoto Uchida told Reuters in an interview.

The "uncertain situation" around the supply chain - including measures to control COVID-19 in China - is the biggest risk on the horizon, Uchida said.

Source: Reuters/fh

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