Nissan triples full-year profit forecast despite chip crunch, pandemic

Nissan triples full-year profit forecast despite chip crunch, pandemic

AFP / Tokyo

Nissan tripled its full-year net profit forecast on Tuesday as it rebounded from the impact of the pandemic with a strong quarterly performance, saying it expected to withstand challenges including the chip crunch and rising raw material prices.

The Japanese auto giant has faced a series of trials in recent years, from weak demand to the fallout from the arrest of former boss Carlos Ghosn, and its annual earnings were last in the black in 2018-19.

But despite lower-than-expected sales volume so far this fiscal year, mainly due to the microchip shortage, “the quality of sales in each market continued to improve, resulting in higher profit per unit,” Nissan said.

The company now projects ¥180bn ($1.6bn) in net profit for the year to March 2022, up from an earlier estimate of ¥60bn.

But it revised down its full-year sales forecast to ¥8.8tn from ¥9.75tn.

“The semiconductor shortage continues to be a challenge for the automotive industry,” chief operating officer Ashwani Gupta told reporters.

But “we anticipate that our sales performance efforts...will more than offset the reduction in the sales volume resulting from these challenges.”

A shortage of semiconductors — a key component in modern cars — has held back global car production,