Nissan loses $6.2B as it prepares to slim down
Previously, Nissan had forecast a much smaller loss
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Nissan Motor Co. recorded a $6.2 billion loss in the year ended in March after it took big write-downs as part of a restructuring plan that aims to make the car maker leaner and more profitable.
Nissan said Thursday it booked Yen603 billion ($5.6 billion) in restructuring costs and impairment losses, leading to a net fiscal-year loss of Yen671 billion. Previously, Nissan had forecast a much smaller loss based on its operating performance, but it had warned that one-time charges might widen the figure.
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The company's shares rose 8.2% in Tokyo trading Thursday, before the loss announcement, as investors bet that the worst of its troubles were over.
A man walks past the global headquarters of Nissan Motor Co., Ltd. in Yokohama near Tokyo, Wednesday, May 27, 2020. (AP Photo/Koji Sasahara)
Nissan Chief Executive Makoto Uchida said the company had gone astray by seeking "excessive sales expansion." He said its new strategy is "maintaining financial discipline and focusing on net revenue per unit to achieve profitability."
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The company said it would reduce annual production capacity by 20% to about 5.4 million units a year and close a factory in Barcelona, Spain, eliminating 3,000 jobs. It said it would aim for cost savings of Yen300 billion a year, confirming an earlier Wall Street Journal report.
The auto maker said it had ample cash on hand to weather a difficult business environment. It said it raised Yen712.6 billion in April and May to respond to the coronavirus pandemic and had unused credit lines totaling about Yen1.3 trillion.
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Nissan's global sales fell 42% in April from a year earlier, but its business has begun to pick up in China, one of its core markets alongside North America and Japan under the new strategy to divide up the global car business with alliance partner Renault SA.