Nissan Motor Co. has reported a better-than-expected 38% rise in profit for this year on the back of stronger sales, signaling a brighter future for the Japanese automaker. The company has been going through a difficult period in recent years, which led to it pushing for a turnaround. However, the automaker’s alliance with Renault has not been an easy ride, and it is currently facing headwinds in the Chinese market. Despite these challenges, Nissan’s bullish forecast is driven by expectations of nearly 30% sales growth in both North America and Europe.
However, the outlook for Nissan in China is not as rosy, with the automaker predicting a growth rate of only 8%. The Chinese market is the largest auto market globally, and local players are becoming more agile, posing a considerable challenge to global automakers. The rapid rollout of battery-powered electric vehicles (EVs) in China is adding to the pressure on Nissan, and the speed of change in the
market is far exceeding the company’s expectations.
During an earnings briefing, Nissan’s CEO, Makoto Uchida, acknowledged the need for the automaker to move away from conventional methods and shift to a more flexible structure. The company needs to speed up the way it designs, manufactures, and sells cars in China. Furthermore, the switch to EVs in China is driven by consumers, not just incentives and number plate restrictions.
COO Ashwani Gupta said at the briefing that Nissan needs to speed up the way it designs, manufactures, and sells cars in China to remain competitive. According to Reuters, the company’s improved sales outlook is driven by expectations to sell 29% more cars in North America, or 1.32 million vehicles, and 27% more in Europe. In China, Nissan expects volumes to rise 8% to 1.1 million vehicles. A better outlook for materials prices is also contributing to the upbeat forecast, which will help offset pressure from a stronger yen.
Ultimately, Nissan’s growth plans revolve around software and EVs, both independently of Renault. Nissan and Renault look to settle the terms of their reworked alliance by mid-year. This move comes as Nissan seeks to turn itself around after years of turmoil. The automaker is hoping that the positive forecast will help it continue its upward trajectory and cement its position in the global automotive market.