Nissan Motor Co reported Thursday the first drop in annual profits under its legendary chief executive Carlos Ghosn, who described the slump as a "wake-up call" for the Japanese automaker.
Nissan predicted a rebound in profits this year but its one-time saviour, whose downsizing at Renault earned him the nickname of "Le Cost Killer," unveiled no major new emergency measures to address the slump.
Nissan reported an 11.1 percent drop in net profit to 460.80 billion yen (3.98 billion dollars), down from 518.05 billion in the previous fiscal year. Operating profit fell 10.9 percent to 776.94 billion yen while revenue rose 11.0 percent to 10.47 trillion yen, helped by a weaker yen.
Ghosn described the fall in profits as "a bump in the road", but said that Nissan was still in much better shape than in 1999 when he was brought in by Renault, which took a controlling interest in loss-making Nissan.
"It's not a near-death experience like 1999," he said, "But we have had an early wake-up call. We will get past this bump." Ghosn, who said recently Nissan was in a "performance crisis", blamed the slump on price competition, weaker sales volume and higher raw materials costs.
But he predicted a rebound in profits in the current fiscal year to March 2008, forecasting net profit of 480 billion yen and operating profit of 800 billion yen, although revenue is expected to fall to 10.3 trillion yen. Nissan said it would push back by one year its previous target of selling 4.2 million vehicles in the fiscal year March 2009.
Nissan's global sales fell 2.4 percent in the year to March to 3.483 million vehicles despite the launch of 10 all-new models, which Ghosn noted had come late in the fiscal year. The company struggled in particular in its home market Japan, where sales slumped 12.1 percent to 740,000 vehicles and its market share shrank 1.2 percentage points to 13.2 percent.
Nissan will reduce overall production in Japan to meet the smaller demand, though it will beef up output of popular minicars, Ghosn said. In the United States, Nissan's sales dropped 4.0 percent to 1.035 million vehicles. Looking forward, the company will launch 11 more new models by March in various international markets, followed by at least 33 more new products to be introduced in the following three years, Ghosn said.
Ghosn, a Brazilian-born Frenchman of Lebanese decent, was the first foreigner to head a major Japanese company and won over a loyal fan base for his quick results and strong work ethic.
But he has reduced the amount of time he spends at the Japanese automaker and in April 2005 he also took the helm of French partner Renault. Japanese analysts have criticised Nissan for its slow progress in the hybrid sector, while its Japanese rivals, particularly Toyota, have made significant investment and advancement in the field.
Ghosn said Nissan would focus increasingly on environment technology, including hybrids and fuel cells, although he said he still considered the petrol-electric hybrids to be a "niche market."