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Nissan in line with profit goal

From Reuters | May 28,2007

Nissan Motor Co. Ltd. <7201.T> is on track to hit its net profit target for the current fiscal year, Chief Executive Carlos Ghosn said on Thursday, after missing last year's target by about 10 percent.

Japan's No.3 carmaker last month forecast net profit of 480 billion yen ($3.95 billion) for the year to end-March 2008.

Asked if Nissan would hit that target, Ghosn said: "We are pretty confident, but it's only two months into the fiscal year so we'll have to see."

Nissan undershot its $4.4 billion profit target for 2006-07 by a tenth and its fourth-quarter profit fell by nearly half as the company announced employee buyout programs in both Japan and the United States.

After transforming a near-bankrupt Nissan into one of the sector's most profitable carmakers, Ghosn is under pressure to show he can steer the company to sustainable and steady growth.

Nissan was overtaken as Japan's second-biggest automaker by Honda Motor Co. Ltd. <7267.T> last year and lags bigger domestic rivals in brand image, having lost years of aggressive research and development in the late 1990s as it scrambled to stay afloat.

Ghosn, speaking to reporters after a speech in Detroit, said he expected industry-wide sales in the United States -- its largest market -- to weaken this year.

The world's biggest car market is expected to be tough as a weak housing market and higher gas prices keep drivers away from showrooms.

Nissan's U.S. sales fell more than 11 percent on an adjusted basis in April and were roughly flat in January-April.

Toyota, which passed General Motors Corp. as the world's largest automaker in the first quarter, last month posted its lowest monthly sales growth since August 2004.

Overall U.S. light vehicle sales slipped to an annualized rate of 16.27 million units in April, down from 16.69 million a year earlier, according to tracking service Autodata Corp.


Ghosn, who is also chief executive of Renault SA , said he had not had any talks with Cerberus Capital Management over either an alliance with Chrysler Group or a separate deal for Nissan.

Ghosn said he had not had any contact on either topic with Cerberus, the private equity firm that acquired Chrysler in a $7.4 billion deal earlier this month.

But Ghosn does see further auto industry consolidation.

Ghosn last year led an effort to forge an alliance with GM in which Nissan/Renault could take up to a 20 percent stake in the U.S. automaker, but the talks ended when GM sought payment for what it said would have been a disproportionate share of the benefits of an alliance.

Nissan shares have risen 12 percent since a 2007 low on April 25, and trade at 11.7 times forecast 2007-08 earnings, compared to 13.8 times for Toyota and 12.4 times for Honda.

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