AutoBeta(AutoBeta.net)02/13 Report--

Nissan officially announced its financial results from April to December of fiscal year 2019 on February 13. The company reported revenue of 7.5073 trillion yen in the first three quarters, down 12.5% from a year earlier, operating profit of 54.3 billion yen, down 82.7% from a year earlier, and net profit of 39.3 billion yen, down 87.6% from a year earlier. Of this total, there was a net loss of 26.09 billion yen in the third quarter (October-December), compared with a profit of 70.4 billion yen in the same period last year. Nissan's last quarter results were "disappointing", which will be Nissan's first quarterly loss since March 2009.

The reason for the loss is also clear, mainly because of the decline in Nissan's sales in major markets around the world and the chaos caused to Nissan after the dismissal of former Nissan chairman Ghosn for misconduct.

According to official sales figures, the Renault-Nissan-Mitsubishi alliance sold 10.16 million vehicles worldwide in 2019, down 5.6 per cent from last year. Among them, Nissan's global sales were 5176189, down 8.4% from the same period last year, although the decline was small, but it also exceeded the decline of the alliance.

From the perspective of sales distribution, Nissan declined to varying degrees in 2019 in the Chinese market, the American market, the European market and the Japanese market, by 1.1%, 9.9%, 17.2% and 7.8% respectively.

The Chinese market and the American market are the two major auto markets of Nissan, both of which have a downward trend to varying degrees. Among them, the US market, Nissan's second largest market, also saw a 9.9% decline, which is not a performance for Nissan.

China, Nissan's largest market, sold 1.54 million vehicles in 2019, a modest decline of 1.1 per cent, but more modest than other Japanese brands. Nissan mainly relies on the good performance of Xuanyi, Xiaoke, Teana and Qijun in China, but not because of the brand premium, but on the huge discount of the terminal, if there is no terminal discount, it is difficult for Nissan to make a breakthrough. In addition, Infiniti, a luxury brand owned by Nissan, has also been marginalized by the market, with total sales of only 35035 vehicles in 2019.

Another important reason for Nissan's performance loss is the chaos within the company after former Nissan Chairman Ghosn was accused of wrongdoing.

In November 2018, Ghosn was arrested and tried in Japan on charges of financial crimes. Shortly after Ghosn's arrest, Nissan issued a statement accusing Ghosn of a series of misconduct.

Ghosn was released on bail after paying a bond of 1 billion yen in March 2019, was arrested and jailed again on April 4, and was released on bail again on April 25. Ghosn was closely monitored until he was interrogated in Japan in April this year.

By the end of 2019, however, Ghosn staged a dramatic "movie". Ghosn fled Japan and went to Lebanon under close Japanese surveillance. On January 8, Ghosn held a press conference in Lebanon, accusing Nissan of colluding with Japanese officials.

Ghosn's series of "operations" led to chaos within Nissan and plunged Nissan into turmoil. Nissan filed a civil lawsuit against Ghosn on Feb. 12, demanding compensation of 10 billion yen. Nissan hopes to pay the high compensation that the group may face because of the Ghosn case. In addition, Nissan may sue Ghosn for defamation of his false remarks at a press conference in Lebanon.

In order to recover from the disadvantage, Nissan proposed a cost-saving plan of 480 billion yen. Nissan plans to cut at least 4300 jobs and close two production plants, on top of the 12500 job cuts announced last July, as part of a plan to increase profits by at least 480 billion yen by 2023, according to people familiar with the matter. The company expects to cut production capacity by 10 per cent by 2023 to control costs.

Through capacity cuts and layoffs, sales in the Chinese market have grown in proportion. However, under the outbreak, the suspension of production by Chinese parts manufacturers also led to the suspension of production at Nissan's Kyushu plant, which in turn had a negative impact on Nissan's 2020 performance.

According to the latest sales, Nissan sold 118143 vehicles in China in January 2020, down 11.8 per cent from a year earlier.

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