Nissan drives profits to new high

Nissan this week unveiled record profits as the Japanese car group made hay in the US at the expense of America’s domestic automotive giants.

Nissan’s operating profit for the year ending March came in at a best-ever $8bn (£4.2bn), more than four per cent ahead of its 2003 figure, following record sales of almost 3.4 million vehicles.

The Japanese group’s most significant headway came in the US, where it sold more than one million vehicles for the first time, an increase of 18 per cent.

The success of Nissan in the US goes some way to explaining the problems facing General Motors and Ford, both of which — particularly GM — released disappointing financial figures over the past few weeks. Fellow Japanese car companies Toyota and Honda are also picking up sales in North America, where consumers seem ever more willing to shed their loyalties to domestic brands in favour of smaller, more economical models from overseas.

Nissan’s sales in Japan grew slightly but its European volumes remained flat at 544,000 vehicles. The company builds the Micra at Sunderland, where it has developed one of the world’s most productive automotive manufacturing facilities.

Despite its robust financial performance — all the more remarkable given the nearbankrupt state the company was in as recently as 1999 — Nissan warned it is not immune from the problems afflicting the rest of the global automotive sector.

The company said growth would be far more modest in the year ahead, citing the effects of uncertainty in the US and Japanese markets, higher commodity and energy prices and volatile exchange rates.

However, Nissan retained its commitment to sell more than four million vehicles a year by 2008 and outlined plans for the launch of 28 models around the world.

Its Infiniti luxury car series, currently sold only in selected markets including the US, will be launched as a global brand in new markets such as China and Russia. With his turnaround of Nissan effectively complete, chief executive Carlos Ghosn will now turn his attention to Renault, which has a 44 per cent stake in the Japanese car company.

‘The fundamentals of the Nissan business are strong and our products are attractive to customers,’ said Ghosn. Ghosn will add the top job at Renault to his existing Nissan responsibilities, and said co-operation between the companies would be strengthened.