Among Japan's Carmakers, Nissan Goes From Profit Leader to Laggard

Almost two years ago, Nissan Motor led all Japanese carmakers in profits. It was faster than its peers in moving production overseas to counter the stronger yen, expanding into emerging markets, and recovering from the tsunami and other natural disasters in 2011. Today it’s recovering from production delays. Emerging markets are slowing, and it’s missing out on the profit boon from a weaker yen enjoyed by most Japanese exporters. The result: Nissan today has become Japan’s least profitable carmaker.

The company’s net income rose 57 percent, to 84.3 billion yen ($825 million), in the three months ended Dec. 31, but that net was 3.3 percent of revenue, the lowest margin among Japanese carmakers last quarter. “There’s a sense of crisis in the company, and [Chief Executive Officer Carlos] Ghosn has started to address problems,” says Tsuyoshi Mochimaru, an auto analyst at Longine, an investment analysis firm based in Tokyo. “Things will improve but will take some time.” Chief Financial Officer Joseph Peter said on Feb. 10 the company is on track to reach a midyear operating margin target of 8 percent.