Tokyo: Nissan Motor Co. said Friday that its net profits surged 26.6% in the third quarter, snapping a one-year downturn as new model launches boosted demand in a sluggish global economy.
But Nissan, Japan’s third-largest automaker, kept its cautious outlook for the full-year, noting that slowing economic growth and financial market turmoil was keeping a lid on demand in the giant US auto market.
Nissan’s net profit came to $1.24 billion in the three months to December, marking the first increase in five quarters.
Operating profit rose by 15.8% to 211.94 billion yen as revenue grew by 18.2% to 2.77 trillion yen, a company statement said.
“Despite the headwinds that affect our industry, Nissan has benefited from the success of the new products launched during the past 12 months,” chief executive Carlos Ghosn said in a statement.
“Although the market outlook remains volatile for the coming months, Nissan is focused and on track to deliver our full year objectives,” he added.
Nissan’s global sales rose 13% in the third quarter to 898,000 vehicles, following the launch of nine models in the first nine months of 2007 including the X-Trail compact sports utility vehicle and the Altima coupe.
Sales rose 5.1% in the US and by 12.5% in Europe, but fell by 0.9% in Japan.
With Japan’s population greying and shrinking, the country’s automakers are relying increasingly on overseas markets to power their growth.
Japanese automakers have enjoyed brisk sales in the United States, helped by their cars’ environmentally friendly credentials.
But with the subprime loan crisis weighing on the US auto market, emerging economies such as Brazil, Russia, India and China are becoming ever more important for Nissan and its rivals.
In the United States, “the environment has been quite difficult,” said corporate vice president Joji Tagawa.
“The truck market remains sluggish in the United States and the overall US the economy is facing difficulties.”
But at the same time, “there was a significant jump in sales in Russia,” he said.
It was a much better performance by Nissan in the third quarter than in the first half of the fiscal year, when net profits had slumped by 22.5% due to higher taxes and weak domestic sales.
The weak first-half performance was a drag on nine-month net profits, which fell 9% to 344.64 billion yen.
Operating profit rose 8.9% to 579.08 billion yen in the first three quarters of the fiscal year as revenue increased by 13.9% to 7.83 trillion yen.
Nissan kept its forecast for an annual net profit of 480 billion yen, up 4.2% from the previous year, when it reported the first drop in profits under its onetime saviour Ghosn, who now heads both Nissan and Renault.
Warning that Nissan was in a “performance crisis”, Ghosn last year moved to reshuffle top management, lay off 1,150 workers and eliminate a further 1,500 positions at Japanese factories through voluntary retirements.
Nissan, which was overtaken by Honda in 2006 in terms of sales, sees a 3% rise in operating profit in the current fiscal year to March to 800 billion yen and a 1.6% drop in revenue to 10.3 trillion yen.
“Clearly the US market is going through some turmoil right now. It has a lot of challenges ahead of it for 2008,” said Nissan spokesman Simon Sproule.