Nissan forecasts huge annual net loss of up to $5.3bn

TOKYO: Struggling Japanese auto giant Nissan issued a stark profit warning on Thursday, forecasting a huge loss of up to $5.3 billion in the 2024-25 financial year.

One of the top 10 automakers by unit sales, Nissan is heavily in debt, having trouble selling vehicles in the Chinese market, and like its peers faces a potential body blow from US President Donald Trump’s vehicle tariffs.

“We are taking the prudent step to revise our full-year outlook, reflecting a thorough review of our performance and the carrying value of production assets,” chief executive Ivan Espinosa said in a statement.

“We now anticipate a significant net loss for the year, due primarily to a major asset impairment and restructuring costs as we continue to stabilise the company,” he said. “Despite these challenges, we have significant financial resources, a strong product pipeline and the determination to turnaround Nissan in the coming period.”

Nissan -- which will announce its earnings in mid-May for the 2024-25 financial year that ended on March 31 -- said it expects to report a full-year net loss of 700-750 billion yen ($4.9 billion-$5.3 billion).

In February, the company had projected a much smaller annual net loss of 80 billion yen ($560 million). Nissan has lurched from crisis to crisis in recent years as it was hit by the arrest of former boss Carlos Ghosn, the Covid pandemic and the Ukraine war.

Last year, it announced 9,000 job cuts worldwide as it reported a 93 per cent plunge in first-half net profit. Then merger talks with its rival Honda -- seen as a bid to catch up with Tesla and Chinese electric vehicle firms -- collapsed in February.

Those discussions unravelled after Honda proposed to make its struggling competitor a subsidiary instead of a previously announced plan to integrate under a new holding company. Nissan’s shares have shed more than 40 per cent of their value over the past year, and in March, the company’s then-CEO Makoto Uchida said he was stepping down. Meanwhile ratings agencies have cut Nissan’s credit rating to junk, with Moody’s citing “weak profitability driven by slowing demand for its ageing model portfolio”.