Nissan CEO Makoto Uchida says soaring U.S. selling expenses fueled a 99 percent plunge in it’s quarterly operating profit, forcing him to cut the company’s full-year earnings forecast.
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U.S. sales also hit by an aging portfolio and a lack of hybrids. TOKYO – Nissan has a Rogue problem in the U.S. that is torpedoing global profits. A lackluster launch of the updated crossover, Nissan’s top-selling nameplate, forced the embattled Japanese automaker to hoist incentives on mounting inventories of the outgoing model. The result was soaring expenses that nearly erased parent company operating income. In announcing the dramatic profit plunge in Nissan’s fiscal first quarter, CEO Makoto Uchida blamed the downturn on U.S. operations and cut the company’s full-year financial outlook. “We were unable to boost volume as expected,” Uchida said at the company’s July 25 earnings announcement. “This has been a very challenging quarter for Nissan.” Nissan’s operating profit collapsed 99 percent to 995 million yen ($6.4 million) in the three months ended June 30. Net income tumbled 73 percent to 28.56 billion yen ($183.0 million). Worldwide sales essentially flatlined at 787,000 vehicles in the April-June quarter. Nissan’s North American volume declined 1.7 percent to 323,000 vehicles, on a 3.1 percent slide in U.S. deliveries to 237,000. Sales slid because of problems in model changeovers for the Rogue and Sentra small car as well as because of Nissan’s aging product portfolio and its lack of hybrids. “The results for the first quarter were due to the impact of the U.S. operations,” Uchida said. “We knew that optimization of inventories in the U.S. would pressure our profit.” Selling expenses To limit the decline and bolster demand, Nissan booked overall selling expenses and pricing adjustments of around 77.8 billion yen ($498.5 million), taking a huge bite out of operating income. Nissan cleared stocks of the 2023 Rogue as the company rolled out the freshened 2024 model of the popular nameplate. The model changeover, Uchida said, was further undermined by a sudden softening of overall U.S. market demand that required more spiffs. Nissan’s spending over the quarter came mostly in the form of consumer loan assistance, instead of cash on the hood, in an effort to buoy resale values, Uchida said. “The most important factor here is U.S. inventories,” he said. Nissan’s global inventory, including dealer and company stocks, has swelled since March 2022, when it stood at 250,000 vehicles. By the latest quarter, it had ballooned to 640,000 vehicles. Nissan plans to reel in inventories to manageable levels over the July-September quarter, partly by adjusting production, Uchida said. Upcoming updates of higher-margin, up-market nameplates, including the Murano crossover and Armada SUV, will help sell vehicles, he said. Nissan thinks it can bring down U.S. inventories 20 percent by the October-December quarter. In other regions, Nissan’s sales rose 7.6 percent to 79,000 in Europe in the quarter ended June 30. China saw a stabilization from last year’s sales slide, contributing a 3.3 percent volume increase to 167,000 vehicles.
CEO Makoto Uchida says Nissan U.S. incentive spending nearly erases quarterly profit
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📉 Nissan Shares take a hit After Profit Warning 🚨 Nissan faced a decline in its stock value, dropping over a profit warning due to intense sales competition, particularly in the United States. The Japanese automaker's net profit in the first quarter dropped 73% year-on-year to 28.6 billion yen, significantly below analyst expectations of 97.1 billion yen. Taking into consideration the first quarter drop, the full-year net profit forecast has been adjusted from 380 billion yen to 300 billion yen. CEO Makoto Uchida acknowledged the challenging results and outlined measures to recover performance, aiming to maximize sales of new and refreshed models in the second half of the year. Despite steady global sales, increased sales incentives and marketing expenses to meet competition, especially in the U.S., impacted profits. Chief Financial Officer Stephen Ma noted that while competition remained intense, Nissan performed well among international brands. As the global automotive landscape evolves, companies like Nissan and Honda are adapting strategies to navigate challenges and seize new opportunities in key markets. #Nissan #AutomotiveIndustry #ElectricVehicles #GlobalMarket #Innovation #ChinaMarket #USMarket For more industry and career news, follow Turnpoint Consulting Co., Ltd
Nissan shares plunge after profit warning
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As Toyota Motor Corporation gears up for its fiscal-year earnings announcement, CEO koji Sato faces significant challenges despite expecting record profits. 𝗚𝗿𝗼𝘂𝗽 𝗦𝗰𝗮𝗻𝗱𝗮𝗹𝘀: Recent quality scandals have tarnished Toyota's reputation, leading to production halts and sales suspensions across various subsidiaries. 𝗥𝗮𝗺𝗽𝗮𝗻𝘁 𝗚𝗿𝗼𝘄𝘁𝗵: The company's rapid expansion has overstretched its resources, prompting a strategic slowdown to reassess and ensure sustainable growth. 𝗪𝗲𝗮𝗸 𝗬𝗲𝗻: While beneficial last fiscal year, the fluctuating yen poses a risk to future profits as global economic conditions shift. 𝗖𝗵𝗶𝗻𝗮 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: Despite efforts to boost sales with new EV models, Toyota continues to struggle in the competitive Chinese market. 𝗘𝗩 𝘃𝘀. 𝗛𝘆𝗯𝗿𝗶𝗱: Toyota's cautious approach to fully electric vehicles contrasts with its success in hybrids, posing long-term strategic questions. The company's focus on digital transformation, customer-centric approaches, and collaborative ventures in emerging markets further illustrates its comprehensive strategy to adapt and thrive amidst challenges https://lnkd.in/dex55fQH Toyota's plan to navigate these challenges is rooted in a balanced approach that prioritises quality, sustainability, technological innovation, and strategic market adaptation. #toyota #automotiveindustry #businessstrategy #electricvehicles #corporategovernance #financialforecasting
From scandals to slowdown, Toyota faces these top five challenges as it pursues record profits
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Toyota's full fiscal year profit forecast has been raised after reporting a nearly doubled profit in the October to December quarter compared to the year before. The company's favorable exchange rate also contributed to its strong earnings, and it has revised its profit and sales projections up for the year. However, there have been challenges related to the shortage of computer chips and a scandal at subsidiary Daihatsu Motor Co., which has affected the company's brand image and sales in Japan. #AsiaOperations #OperatingResults #Japan Follow us for daily updates on risk and operations in Asia! https://lnkd.in/gQayd2xK
Toyota raises its profit outlook after solid earnings | The Asahi Shimbun: Breaking News, Japan News and Analysis
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Toyota Motor Corporation reported record profits, sales, revenue, and production in its just-ended fiscal year under new CEO koji Sato. However, the company plans to pull back on its expansion and reinvest its profits into suppliers, dealers, employees, and next-generation technologies like electrification and AI. Toyota will see a 20% drop in operating profit and 39% drop in net income this fiscal year as it makes these strategic investments for long-term sustainable growth. Key highlights include Toyota's surge in hybrid vehicle sales, which now comprise a third of its global volume, and its plans to increase EV sales by 46% this year. The company also supports its business partners through higher supplier prices, worker wage hikes, and dealer incentives to improve working conditions and recruitment. #toyota #recordprofit #salesgrowth #hybridsuccess #evinvestment #kojisato #financialyear2024
CEO Koji Sato reloads for long-term growth after leading Toyota to record profit, sales, production
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Toyota, after record financial results in the previous fiscal year, faces strong headwinds as it readies this week's fiscal Q1 earnings report. TOKYO — CEO Koji Sato drove Toyota Motor Corp. to across-the-board records in profits, sales and production output in the stellar fiscal year that ended March 31. Now, as the world's biggest carmaker prepares to announce results for the first quarter of a new fiscal period on Aug. 1, Sato's challenge will be sustaining that momentum. So far, Toyota is facing some strong headwinds. Primary among them is the spillover of quality and certification lapses from Toyota Group companies to the mother ship itself. Toyota Motor was tripped up in the scandal in June and had to temporarily suspend output of some models, including the popular Yaris Cross. Yet even before the scandal erupted, Sato was signaling earnings would slow down. At the previous financial results announcement in May, Toyota executives forecast global retail sales would dip 1.3 percent to 10.95 million units this fiscal year, from last fiscal year's high. Operating profit was pegged to slip 20 percent to ¥4.30 trillion ($26.74 billion) through next March, and net income was expected to fall 39 percent to ¥3.57 trillion ($22.20 billion). Scandal scars In early June, Toyota reported that it had conducted improper vehicle safety verification on a handful of nameplates, including three that were still in production -- the Corolla Fielder, Corolla Axio and Yaris Cross. Japanese regulators forced the company to suspend output of them. The revelation was especially embarrassing, after earlier missteps at several Toyota Group companies, including Hino, Daihatsu and Toyota Industries Corp. Production problems Output of the three affected affected nameplates remains suspended through August, and Toyota still hasn't finalized a resumption date as it confirms certification conformity with Japan's ministry of transportation. A first glimpse at the damage will likely appear in the first-quarter results. Forex flux The ultraweak Japanese yen has tumbled to its lowest levels against the U.S. dollar since 1990. Toyota's exports from Japan in the just-ended fiscal year reached 2.08 million vehicles. The weak yen added a whopping ¥685 billion ($4.26 billion) to the company's operating profit through the first three quarters of the fiscal year. Toyota expects that tailwind to subside. China challenge Like its global rivals, the world's biggest automaker faces big challenges in the world's biggest auto market. Toyota's China sales peaked at 1.94 million vehicles in 2021 and have slid every year since. Deliveries there fell 14 percent in May and slipped 10 percent through the first five months. Wobbly outlook Toyota's previous earnings guidance for the current fiscal year could be revised. Downgrading the outlook would be a step back from Toyota's conservative forecast. But the carmaker is notorious for setting circumspect goals and then exceeding them.
From scandals to slowdown, Toyota's top 5 challenges in key earnings report
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SCOOP: Nissan Motor Corporation ponders sending U.S. #Rogue production to Japan if it cannot lower purchasing costs. * Nissan seeks an average 20% cut in parts pricing on the fourth-gen Rogue crossover. Some suppliers are being asked for up to 30%, people briefed on the matter told Automotive News. * Losing Rogue would devastate Nissan’s U.S. industrial base. The company’s two domestic factories have a combined 52 percent capacity utilization. * The best-selling Rogue accounts for about 40 percent of annual output — or nearly 200,000 vehicles — at Nissan’s Smyrna, Tenn. factory. “Pushing the Rogue to Japan will add considerable red ink to Nissan’s U.S. ledgers. Closing a plant could be in Nissan’s future.” Butzel Daniel Rustmann Bain & Company AutoForecast Solutions LLC Sam Fiorani #manufacturing #economicdevelopment
Nissan could pull next-generation Rogue production out of U.S.
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Toyota expects stellar results in its fiscal-year earnings announcement on May 8. But there could still be some wobbles in the final report. TOKYO — CEO Koji Sato has wrapped up his first year at the helm of Toyota Motor Corp., driving the world's biggest automaker to record sales and record output and, most likely, record profit. But Sato is also riding high on the momentum of his predecessor and mentor, Akio Toyoda. The scion of the founding family stepped down last year after leading Toyota for more than a decade and building a veritable Japanese juggernaut that looks stronger than ever. Sato, who took over from Toyoda on April 1, 2023, delivers the official fiscal-year financial results of his first term at a May 8 news conference in Tokyo. By all measures, Sato will likely be announcing stellar figures. Aside from already booking record sales and production volume in the fiscal year ended March 31, Toyota expects to achieve record operating profit. In fact, Toyota expects both operating profit and net income to nearly double compared with the previous year. But there still could be some wobbles in the final report, including guidance on the current fiscal year and whether red-hot Toyota can keep up its relentless pace. "You're not going to have growth like this this year, because last year was extraordinary," says Christopher Richter, lead Asia auto analyst at CLSA in Tokyo. "You had the end of the chip shortage, the end of COVID, the world got back to normal. The auto industry isn't a fast enough growth industry to support those kind of numbers for very long." Indeed, Toyota faces five risks to its ongoing profit performance. 1. Group scandals The Toyota Group has been beset by embarrassing quality scandals that forced production shutdowns and sales suspensions, while tarnishing the company's reputation. Toyota truckmaking unit Hino Motors was tripped up in 2022 after fudging emission certifications in an uproar still looming over the company. Hino has been earmarked to merge with Mitsubishi Fuso, the Japanese truck manufacturer owned by Daimler. In December, Toyota's minicar subsidiary, Daihatsu, suspended global shipments after it was found to have rigged side-collision safety tests. Daihatsu had to stop shipments of all models. Then in January, Toyota halted worldwide shipments of 10 nameplates because engines supplied by Toyota Industries Corp. had undergone improper horsepower and torque testing. The reduced output and sales have dented the rosy results Toyota originally expected. Group supplier Denso Corp. reported an 11 percent retreat in fiscal year operating profit, partly on quality provisions. Watch for more knock-on effects in Toyota's final report. 2. Rampant growth 3. Weak yen 4. China challenge 5. EV vs. hybrid
From scandals to slowdown, Toyota faces these top five challenges as it pursues record profits
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Toyota Motor Corporation late to the party? We think not. Check out these financial results for Q3. WOW, given the economic and geopolitical headwinds facing the industry. We suppose that Toyota being the best operated mass producer of automobiles is open to interpretation. It's hard to argue with this type of performance. - Toyota more than doubled its operating profit in the latest quarter, as a free flowing supply of vehicles fed booming sales in every major market. Operating profit at the world’s biggest automaker soared to 1.44 trillion yen ($9.65 billion) in the company’s fiscal second quarter ended Sept. 30, from 562.7 billion yen ($3.77 billion) a year earlier. - On a global basis, Toyota delivered a stellar double-digit operating profit margin of 12.6 percent in the quarter, up from a respectable 6.1 percent the year before. - Net income nearly tripled to 1.28 trillion yen ($8.58 billion) in July-September, from 434.2 billion ($2.91 billion) a year earlier. - Revenue surged 24 percent to 11.43 trillion yen ($76.58 billion) as the impact of rising volumes was multiplied by beneficial foreign exchange rates which bolstered yen-denominated earnings. #business #leadership #strategy #automotiveindustry #management #culture #sales #marketing #innovation #ecommerce #branding #business #digitalmarketing #ai #autonomousdriving #media #digitalmarketing
Toyota quarterly profit surges on strong sales, weak yen
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Volkswagen Faces Profit Warning and Potential Audi Plant Closure Volkswagen's shares plummeted after the company issued a profit warning and hinted at the potential closure of an Audi plant in Brussels. The automaker revised its operating return on sales forecast down to 6.5% to 7%, from the previous 7% to 7.5%, as demand for the Audi Q8 e-tron, an electric vehicle, plummeted. European automakers, including Volkswagen, suffer from declining electric vehicle sales, worsened by competition from state-subsidized Chinese rivals. The potential shutdown of the Brussels plant, which employs 3,000 people, could be Volkswagen's first factory closure in nearly four decades. The company estimates that the closure or repurposing of the site could cost up to 2.6 billion euros ($2.81 billion) in operating profit for the 2024 fiscal year. Deutsche Bank analysts see the potential shutdown as a positive move in the long term. Audi, a division of Volkswagen, has been identified as a major concern for investors due to delays in new model launches and an aging portfolio. The average age of Audi's models is now six years, compared to three years for BMW and 3.6 years for Mercedes. Volkswagen's overall deliveries have also slumped, with a 3.8% decline globally in the second quarter, and a steeper 11.3% drop for Audi. Deliveries to China fell by 19.3% in the same period, while there were slight increases in Western Europe and North America. # Thank you Elena Martinez for your submission!
Volkswagen Faces Profit Warning and Potential Audi Plant Closure
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