Nissan reports first quarter results and outlook for 2020

Nissan has announced financial results for the three months that ended on 30 June 2020, and the outlook for fiscal year 2020.

In the first quarter of the fiscal year, global industry-wide auto sales fell by almost half amid the COVID-19 pandemic, impacting Nissan's sales significantly.

Nissan's plants have since resumed operations after suspended production, but face reduced utilisation of their capacity due to lower sales. The company's performance continues to be impacted by the challenging business climate.

For the April to June period, consolidated net revenue was $15.272 billion. The operating loss was $200 million, equivalent to an operating margin of -13.1%. The net loss was $3.71 billion.

Global total industry volume in the first quarter fell 44.5% from a year earlier to 12.49 million vehicles. Nissan's global sales declined 47.7% to 643,000 vehicles. The company's global market share fell 0.3 points from a year earlier to 5.2%. Given the continuing effects of COVID-19 on the global market, Nissan expects a lower business volume in fiscal year 2020. Nissan forecasts global total industry volume to decrease 16% from a year earlier to 72.04 million vehicles. For the full year, Nissan's global retail volume is expected to decline 16.3% to 4.125 million vehicles, on par with the market trend.

Nissan expects its global market share to achieve 5.73%, which is the same level as previous fiscal year. The company will also forgo distribution of dividends for fiscal year 2020, due to the challenges in profitability and free cash flow.

Nissan recently announced its four-year transformation plan, Nissan Next, to respond to the challenging economic outlook and to improve the company's performance.

Nissan expects to reduce fixed costs, mainly driven by a decrease in depreciation costs following the impairment in the previous year, and a reduction of G&A expenses and fixed selling expenses, including advertising. The company is on track to reduce fixed costs by $3.9 billion versus fiscal year 2018.

In addition, Nissan's focus on its core model strategy, including plans to launch 12 new models in 18 months, is in progress. In line with the Nissan Next transformation plan, Nissan remains committed to strengthening its product lineup globally as part of the company's ongoing efforts to make the business more competitive and to continuously deliver customer value.