Nissan Motor Co. said Thursday that its group operating profit for the first half of 2006 fell 15.3 percent year-on-year to 348.6 billion yen, mainly due to falling car sales in Japan and the United States and rising raw materials costs.
But Nissan President Carlos Ghosn stressed that the nation’s second-largest automaker will make a strong recovery for the full year to March with the launch of nine new international models in the second half.
Nissan has launched only one new model in the April-September period.
For the full year, Nissan left its projections of 523 billion yen in net profit, 880 billion yen in operating profit and 10 trillion yen in sales untouched.
Ghosn said there will be a burst of second-half activity.
“In the second half, and into the next fiscal year, you are going to see a return to the intense product launch activity that fueled the Nissan turnaround,” Ghosn told a news conference at Nissan’s head office in Tokyo.
In addition to the nine new launches, Nissan expects the yen’s weakness against the dollar and euro to continue lifting profits and offset the impact of rising commodity prices.
The yen’s depreciation offset the drop in operating profit by 54.8 billion yen.
Despite the drop, however, net profit grew 18.8 percent to 274.2 billion yen in the half, thanks to a one-time gain from the sale of Nissan Diesel Motor Co. shares to AB Volvo.
Consolidated sales totaled 4.53 trillion yen, up 1 percent from the previous year.
In terms of volume, car sales in major markets dropped quickly in the absence of new models.
Nissan’s global sales during the period came to 1.71 million units, down 6.9 percent from the previous year.
Sales in Japan came to 350,000 vehicles, down 16.9 percent from the previous year, with U.S. sales falling 10.2 percent to 513,000 units and European sales dropping 4.4 percent to 275,000.
As for the crumbling of the three-way alliance talks with Renault SA and struggling auto giant General Motors Corp. earlier this month, Ghosn said: “We are in no hurry. We have no need to find more partners.”
Speculation has been rife that Ghosn was trying to engineer an alliance with GM because Nissan is exhausting its synergistic possibilities with Renault and losing momentum for further growth.
“Some observers have looked at our current short-term results and taken our recent discussions with GM as a sign that we lack confidence in our ability to compete without a third partner,” Ghosn said, adding Nissan-Renault won’t be hampered if they can’t find a U.S. partner and noting it is his duty to proceed with the talks.
“I owe the shareholders and stakeholders of (Nissan and Renault), that once an opportunity comes that (will bring) major synergies benefiting Nissan and Renault, I can’t just ignore it.”
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