Nissan profits plunge to near-decade low

By AFP

TOKYO • Crisis-hit Japanese car company Nissan Motor Co Ltd yesterday revealed net profits at a near-decade low as it battles to recover after the shock arrest of its talismanic former boss Carlos Ghosn.

Net profits for the fiscal year to March 2019 came in at ¥319 billion (RM12.09 billion), the lowest amount since 2009/10 when the company was struggling in the wake of the global financial crisis.

It was a decline of 57% compared to the previous fiscal year and the profit outlook for the current fiscal year was forecast to be even worse — at ¥170 billion.

“The performance is a challenging one and we want to change this,” CEO Hiroto Saikawa told reporters.

The firm has been crippled by the reputational damage caused by the legal woes of former chairman Ghosn, who faces four formal charges of financial misconduct that he denies.

But analysts point to several problems for the Japanese firm beyond Ghosn, including apparently declining relations with its French partner Groupe Renault and a dearth of new products.

“They’ve got to let go of Ghosn, he’s out of the company, he’s no longer a director, they have to move beyond that, it’s a distraction,” said Christopher Richter, an analyst for the CLSA brokerage based in Tokyo.

Saikawa “has been in the top job for more than two years — that’s half of a model cycle — so I don’t think you can lay all the blame with Ghosn”, Richter told AFP.

He said Nissan has an “old and unattractive portfolio” and “desperately need new products”, the development of which has been delayed both by the difficulties surrounding Ghosn and the Renault-Nissan relationship.

Nissan, along with Renault and Mitsubishi Motors Corp, make up an unusual three-way alliance that has grown to become the top-selling car group. Ghosn was the driving force between bringing the firms together and has since alleged that Nissan launched an investigation into him over fears he was hoping to merge the Japanese and French firms.

The appointment of new Renault boss Jean-Dominique Senard should open a “new chapter” in ties, said Saikawa earlier this year, but the Japanese company continues to resist anything approaching a merger.

Relations between the two firms appear to be worsening after a brief honeymoon following Senard’s appointment.

“A part of Nissan’s management is settling scores,” said a source close to Renault. “They are trying to pin the company’s bad performance on Ghosn.”

Renault executives feel betrayed, especially Senard, after media leaks of informal talks he thought had been friendly. “He is very angry, and that’s putting it mildly,” a source close to Renault said.

Another source close to the matter in Paris said: “With every day that passes, Senard is being humiliated a little more.” The source added: “Not only is the alliance not working, it has started to slide backwards and that is a threat to Renault.”

Renault’s management is at a loss to understand what Nissan is after. “The only thing that has never been leaked by Nissan is what they actually want,” quipped one Renault manager.

A spokesman for Renault contacted by AFP said the figures were “regrettable”.

“What is bad for Nissan is bad for Renault and vice-versa. And these results are not good news for the alliance. These results reinforce the idea that we need changes,” the spokesman said.

“Joining forces is necessary to fight our competition which is not waiting around for us.” — AFP