Nissan Motor Co. is on the path to emerge as the most profitable Japanese auto maker this year, beating the other two Japanese firms Toyota Motor Corp and Honda Motor Co.
Last year, the company registered better quarterly operating profit owing to the record car sales and witnessed improved market share in all the prime regions. The leading Japanese car manufacturer forecasted its net profit at 290 billion yen ($3.77 billion) for the financial year ending in March. The other two firms, Honda and Toyota forecasted their net profit for the same period at 215 billion yen and 200 billion yen, respectively.
Nissan has already achieved 84 percent of its annual operating profit target in the three quarters of the current financial year. Speaking on this, Hiroyuki Fukunaga, CEO of Investrust said "It looks like the company is doing pretty well compared to Toyota and Honda." He further commented that "These were positive results, but I'm not sure Nissan's share price will gain like Toyota did today. The upward (forecast) revision from Toyota led to hopes for the next financial year, but Nissan seems like it's going at cruising speed."
Toyota’s value in the stock market reached a 6-month-high on Wednesday due to a 5 per cent increase in shares. This was the highest one-day percentage surge in stocks in the past 11 months. The favourable news came a day after the company announced about its revised annual profit forecast, which is a third more than the initial forecast.
In a poll, regarding the full-year operating profit, 25 analysts by Thomson Reuters I/B/E/S forecasted it below 547 billion yen. However, Nissan kept its forecast lower, at around 510 billion yen. The company follows Japanese accounting rules and incorporated China earnings as the operating income. In contrast, the other two, Toyota and Honda, follow the U.S. accounting standards, including the earnings from China in the net income.
By selling around 4.67 million vehicles, Nissan registered 14 per cent increased sales last year. CEO Carlos Ghosn, who is also the head of the partner firm Renault SA, believes that the car manufacturers have to invest in innovative technologies for improved sales. With 1.2 million units sold in the quarter, the company sales increased by 19.5 per cent. As a result, Nissan’s revenue increased by 11 per cent, around 2.33 trillion yen.
The operating profit for the last quarter of 2011 surged 3.6 per cent, equating around 118.1 billion yen. This figure was lower than the profit estimated by the panel of 10 analysts polled by Reuters, which was around 122.6 billion yen. Moreover, the net profit graph of Nissan also witnessed an upward trend, increasing around 3.2 per cent to 82.67 billion yen.
Nissan’s recovery was the fastest, among the three Japanese auto makers, from the damages caused by unfortunate earthquake in March and flood in Thailand. A part of the recovery strategy of the company was to source the auto parts from its global network to make up for the gap caused due to disruption in the supply chains. As per an official statement by the company, Nissan lost just 33,000 units, much lower than the 200,000 vehicles lost by the other two Japanese firms.
Thus, the strategic planning and popularity of its new and revamped models helped Nissan gain over the other two Japanese auto makers Toyota and Honda.
