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Nissan puts key business strategy on hold for sales lag

From news.xinhuanet| April 17,2007

Nissan Motor Co Chief Executive Officer Carlos Ghosn may delay Japan's third-biggest car maker's business goals. These include selling 4.2 million vehicles in the year ending in March 2009, Bloomberg News reported.

"The company will remain focused on the commitments, but may extend the time delivery," Simon Sproule, a Nissan corporate vice president in charge of public relations said in a phone interview Sunday, confirming a report in the Nikkei newspaper.

 "These comments were made by Ghosn."

Nissan in February cut its earnings forecast for the year ended in March due to weaker-than-expected sales in the United States and Japan.

It was the first time for Nissan to miss its earnings and sales targets since Ghosn became the president in 2000. He is currently focusing on a plan to be announced later this month to tackle what he's called a "crisis" at Tokyo-based Nissan.

Ghosn will discuss more about the possibility of delaying the targets on April 26, when the firm releases annual earnings results, Sproule said. Nissan also plans to release its strategies to boost sales.

 The Japanese car maker will probably focus on increasing early retirements, cutting costs further in purchasing, making better use of production capacity and strengthening sales and marketing efforts, especially in Japan and the U.S., said analysts, including Koji Endo at Credit Suisse Group in Tokyo.

Nissan needs to increase sales by about 700,000 vehicles over the next two years to meet its sales target of 4.2 million in the 12 months ending March 2009, which may be difficult after missing a target in the year ended in March 2007.

The auto maker will probably miss a 3.73 million-vehicle global sales forecast for the year ended in March, Ghosn said on February 2.

Nissan in February scaled back its full-year profit forecast 12 percent to 460 billion yen (3.9 billion U.S. dollars) from 523 billion yen. The company has three business commitments under its three-year business plan.

One target is to post higher operating margins than its rivals, second is to have a 20 percent return on investment capital, which measures investment quality, and the third is to sell 4.2 million vehicles in the 12 months ending in March 2009.

Ghosn led Nissan to six consecutive record profits after becoming president in 2000.

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