Nissan Revises Fiscal Year 2023 Outlook, Lowers Sales and Profit Forecasts

Nissan cuts sales and profit forecasts due to lower volumes and higher costs, but remains committed to its long-term goals, including EV transition and new model launches.

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Nissan Revises Fiscal Year 2023 Outlook, Lowers Sales and Profit Forecasts

Nissan Revises Fiscal Year 2023 Outlook, Lowers Sales and Profit Forecasts

Nissan Motor Co. has lowered its sales and profit forecasts for the fiscal year 2023, citing lower sales volumes and higher costs. The Japanese automaker now expects sales of 3.44 million vehicles, down from its earlier target of 3.55 million units. "We were overoptimistic," acknowledged Nissan CEO Makoto Uchida, referring to the company's previous sales targets.

Under the revised guidance, Nissan projects net revenue of ¥12.6 trillion ($81.6 billion), operating profit of ¥530 billion, and net income of ¥370 billion for the fiscal year ending March 31, 2024. These figures represent a downward revision from the company's earlier estimates of ¥13 trillion in revenue, ¥620 billion in operating profit, and ¥390 billion in net income.

The profit forecast downgrade is attributed to several factors, including a 30 billion yen hit due to lower sales and foreign exchange rates, as well as 60 billion yen in cost relief offered to suppliers and other investments. Nissan's aging product lineup, lack of hybrid options in North America, and intensifying competition in China have also contributed to the sales decline. Additionally, logistics issues and an earthquake in Japan have impacted sales performance.

Why this matters: Nissan's revised outlook highlights the challenges faced by automakers in the current market environment, with factors such as supply chain disruptions, rising costs, and shifting consumer preferences impacting sales and profitability. The company's ability to address these obstacles and execute its strategic plans will be vital for its future performance and competitiveness in the global automotive industry.

Despite the downward revisions, Nissan remains committed to its long-term goals. Under its new three-year midterm plan called "The Arc," the company aims to increase global sales by 1 million units and accelerate its electric vehicle transition by 2030. Nissan plans to introduce new models, including more cost-effective electric vehicles, and has announced a partnership with Honda Motor Co. to develop EV technology.

Looking ahead, Nissan will adopt more efficient ways to collaborate with suppliers to successfully deliver its growth plans. The company has decided to provide further support to suppliers struggling with rising costs. "We will continue to work on improving our performance and delivering value to our stakeholders," stated CEO Uchida, emphasizing Nissan's commitment to its long-term objectives despite the near-term challenges.

Key Takeaways

  • Nissan lowers sales and profit forecasts for FY2023 due to lower sales, higher costs.
  • Revised guidance: 3.44M vehicle sales, ¥12.6T revenue, ¥530B operating profit, ¥370B net income.
  • Factors include supply chain issues, competition, lack of hybrid options in North America.
  • Nissan remains committed to long-term goals, plans new EV models and supplier collaboration.
  • Challenges highlight automakers' struggles with market conditions, Nissan's execution of plans crucial.