Nissan Motor Co. on Friday reported the slowest annual profit growth among Japanese automakers as its success in China backfired.
Nissan's net income in the 12 months that ended in March increased 0.3 percent to ¥342.4 billion, the Yokohama-based company said. Next fiscal year's ¥420 billion profit forecast was the smallest among Japan's three largest automakers.
Nissan, which outsells all Japanese automakers in China, was hardest hit when Chinese consumers began to shun Japanese brands as protests flared across the country in September. All three of Japan's largest carmakers saw their China sales fall for three straight quarters, though the plunge in the yen made up for the shortfall at Toyota Motor Corp. and Honda Motor Co.
"The impact from China issues is significant," said Koichi Sugimoto, an auto analyst at BNP Paribas SA. "Even in the January-to-March quarter, there wasn't a recovery yet. Although they'll improve in the second half, we can't be too positive."
Still, this year's outlook is brighter as the weakening yen bolsters profits for Japanese companies. Nissan forecast net income will rise 23 percent in the year ending March, the highest in six years. The forecast was below the ¥475.6 billion average of 23 analyst estimates. Revenue will probably increase 7.7 percent to ¥10.37 trillion, Nissan said.
The company gains about ¥15 billion in operating profit with every ¥1 drop against the dollar, according to the company.
Nissan based its profit outlook on an exchange rate of ¥95 against the dollar, and ¥122 versus the euro. It produced about 22 percent of its cars at home last fiscal year, compared with 44 percent at Toyota.