Nissan’s losses amounted to the equivalent of $421 million in the last quarter as the pandemic slammed profitability and the Japanese automaker fought to restore a brand image tarnished by a scandal centered on its former star executive Carlos Ghosn.
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Nissan Motor Co. had a profit of 59 billion yen in July-September of 2019.
Yokohama-based Nissan reported Thursday its quarterly sales dipped to 1.9 trillion yen, or $18 billion, from 2.6 trillion yen a year earlier.
Nissan officials said its global sales are expected to recover to pre-pandemic levels by December, if improvements continue at the current pace.
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Chief Executive Makoto Uchida promised the company will work hard to recover and become “a trusted company,” delivering products that will be praised as “Nissan-like.”
A section of Nissan’s earnings report addressed the Ghosn case. Former Nissan executive Greg Kelly is standing trial in Tokyo District Court on allegations of violating the Financial Instruments and Exchange Act in not fully disclosing Ghosn’s compensation.
Ghosn, who says he is innocent, jumped bail and fled to Lebanon, which has no extradition treaty with Japan. Kelly also says he is innocent.
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Nissan, as a company, is not fighting the criminal charges and has paid an administrative penalty of 1.4 billion yen or $13 million.
The company reiterated Thursday that it took what happened seriously and has taken steps to improve governance.
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In its report, Nissan accused Ghosn of misusing company assets for personal use, such as spending $27 million of company funds to buy homes in Beirut and Rio de Janeiro, improper use of the company jet and donating $2 million to universities in Lebanon.
Credit: TNS
Credit: TNS
Nissan is suing Ghosn, demanding 10 billion yen ($95 million) in damages.
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The company is still bleeding red ink and expects a 615 billion yen ($5.8 billion) loss for this fiscal year, which ends in March. That is still an improvement over its earlier projection for a 670 billion yen loss ($6.4 billion).
Nissan posted a 671 billion yen loss in the previous fiscal year.
The maker of the Leaf electric car and Infiniti luxury models raised its fiscal year sales forecast to 7.9 trillion yen ($75 billion), better than its earlier projection for 7.8 trillion yen ($74 billion).
Nissan said it’s carrying out cost cuts; its new Rogue crossover is doing well in the U.S. market and it remains a leader in electric vehicles.
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“We will maintain the momentum from the second quarter with further financial discipline and improvement in our quality of sales,” Uchida said, while stressing uncertainties remained because of the pandemic.
Uchida acknowledged global vehicle sales are bound to decline because of the pandemic. The latest forecast says Nissan expects to sell 4.17 million vehicles for the fiscal year, down from 4.9 million vehicles a year earlier.
The latest projection marks a 1% improvement from an earlier forecast. Nissan said it’s sticking to its plan to launch 12 new models, including a new compact car in Japan.
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