Nissan hikes net profit forecast again despite chip shortage

Nissan hikes net profit forecast again despite chip shortage

Nissan hikes net profit forecast again despite chip shortage

Nissan on Feb. 8 hiked its annual net profit forecast again on strong interim results, aiming to weather the global chip shortage as it shifts focus to electric vehicles.

The Japanese car giant now expects yearly net profit to March 2022 of 205 billion yen ($1.8 billion), having already tripled its annual profit outlook in November to 180 billion yen.

“Although the sales volume forecast for fiscal 2021 remains unchanged at 3.8 million units, the severe semiconductor shortage and the increase of COVID-19 infections due to the spread of the Omicron strain are affecting plant operations,” the company said in a statement. “Despite these challenges, Nissan has revised upward its full-year outlook due to further improvement in performance due to the enhancement of quality of sales and cost optimization, ongoing depreciation of the yen and a review of the impact of rising raw material prices.”

It follows several difficult years for Nissan, which has faced trials including weak demand and the fallout from the arrest of former boss Carlos Ghosn.

Satoru Takada, an auto analyst at research and consulting firm TIW, told AFP ahead of yesterday’s results that a good sales environment had allowed Nissan to avoid big discounts.

“What remains to be seen is whether it can stay competitive in the long run, especially once rival companies start using more incentives,” he said.

But Takada warned that the semiconductor situation “might take longer than expected” to improve as companies in different industries compete for the essential components.

Last month, Nissan and its alliance partners Renault and Mitsubishi Motors pledged to boost cooperation as they plough more than $25 billion into the development of electric vehicles over the next five years.