Recall Costs Cut Nissan’s Profits
Nissan Motor Co.’s operating and net income fell 22% and 3%, respectively, in July-September because of greater selling costs and 41 billion yen ($359 million) in recalls.
#economics
Nissan Motor Co.’s operating and net income fell 22% and 3%, respectively, in July-September because of greater selling costs and 41 billion yen ($359 million) in recalls.
Revenue for the fiscal second quarter climbed 9% to 2.9 trillion yen ($25.4 billion). Unit sales rose 4% to 1.38 million vehicles.
But operating profits plunged to 129 billion yen ($1.1 billion), and net income slipped to 142 billion yen ($1.2 billion). Much of the quarter’s special charges were for recalls to replace Takata Corp. airbag inflators that could explode when activated in a crash. Nissan also is recalling more than 1.2 million vehicles in Japan that had been improperly inspected.
The company says increased sales and marketing costs, especially in North America, trimmed operating results by another 45 billion yen ($398 million).
Retail sales in North America, Nissan’s largest market, declined 2% to 377,000 units in July-September. Operating profits plunged 50% to 32 billion yen ($282 million). Sales improved in Japan (+25% to 276,000 units), China (+8% to 336,000) and elsewhere (+8% to 120,000).
Nissan expects continued pressure on operating results. The company now predicts its operating profit for the full fiscal year ending March 31 will drop 13% to 645 billion yen ($5.7 billion) compared with the 8% decline it forecast earlier.
RELATED CONTENT
-
Tariffs on Autos: “No One Wins”
While talk of tariffs may make the president sound tough and which gives the talking heads on cable something to talk about, the impact of the potential 25 percent tariffs on vehicles imported to the U.S. could have some fairly significant consequences.
-
Report Forecasts Huge Economic Upside for Self-Driving EVs
Widespread adoption of autonomous electric vehicles could provide $800 billion in annual social and economic benefits in the U.S. by 2050, according to a new report.
-
On Urban Transport, the Jeep Grand Wagoneer, Lamborghini and more
Why electric pods may be the future of urban transport, the amazing Jeep Grand Wagoneer, Lamborghini is a green pioneer, LMC on capacity utilization, an aluminum study gives the nod to. . .aluminum, and why McLaren is working with TUMI.