Nissan forecasts a net loss of over $6.3 billion for FY2020

KUALA LUMPUR: Japan's third-largest automaker Nissan on Tuesday reported that it expects a net loss of 670 billion yen. It follows the massive 671 billion yen net loss in 2019 that marked the company's worst net loss in 20 years.

Besides, Nissan will face its biggest-ever operating loss of 470 billion yen due to plunging sales amid the uncertainty over the effects of the COVID-19 pandemic. Operating loss in fiscal 2019 was reported at 40 billion yen. In the near future, Nissan expects a further drop in its car selling business with limited car sales.

The net loss for FY2020 will also be impacted by its affiliates' weak performance, like Mitsubishi. Also, costs related to impairment and restructuring are part of the net loss, and it accounted for a significant part of last year's net loss.

Nissan CEO, Makoto Uchida said, "The forecast for fiscal 2020 has become very severe, as an outcome of a challenging business environment and our restructuring. But I believe we are certainly able to achieve a 5% operating profit margin and 6% of market share, our milestones, by fiscal 2023."

As for the 2020 first-quarter results, the automaker posted a net loss of 285.6 billion yen and an operating loss of 153.9 billion yen. The company's global sales for the period fell by 47.7 percent, i.e., the company sold 643,000 units. The sales figure is further expected to fall in the months to come. Looking at the year-wise trajectory, in FY 2019, Nissan sold 4.79 million units that's 13 percent less than what it sold in 2018, and in 2020 the company expects to sell 4,125 million units.

As for its global market share, Nissan expects it to remain the same as it was in 2019, i.e., 5.73 percent. That's due to the overall contracting of the industry because of the economic impact of COVID-19.

As a response to the challenging economic outlook, the automaker has announced Nissan NEXT - a four-year transformation plan. It also plans to launch twelve new cars in a period of eighteen months, including the new Ariya and an all-electric crossover.

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