Nissan Motor Co., Japan's third- largest carmaker, forecast a second straight annual loss as the worst U.S. auto market in almost three decades and a stronger yen erode overseas sales.
The loss may total 170 billion yen ($1.7 billion) for the 12 months ending March, compared with a loss of 233.7 billion yen a year earlier, the Tokyo-based company said in a statement today. The company was expected to forecast a loss of 310 billion yen, according to the median of 17 analysts' estimates compiled by Bloomberg.
Chief Executive Officer Carlos Ghosn, 55, plans to axe 20,000 jobs this fiscal year to help cope with a slump that has forced Toyota Motor Corp. to forecast a second straight loss and pushed General Motors Corp. to the brink of bankruptcy. Overall auto sales in the U.S., traditionally the most profitable market for Nissan and Toyota, have fallen 37 percent this year.
"Ghosn needs to step up cost reductions," said Hitoshi Yamamoto, chief executive officer of Tokyo-based Fortis Asset Management Japan Co., which manages $5.5 billion in Japanese equities. "The recovery for Japanese automakers depends on the U.S., as their reliance on it is still too big."
Nissan expects sales to fall 18 percent this fiscal year to 6.95 trillion yen. It predicted an operating loss of 100 billion yen compared with 137.9 billion yen in the year ended March.
The company based its forecast on exchange rates of 95 yen to the dollar and 125 yen per euro. The stronger yen will widen the operating loss by 170 billion yen, Nissan said.
The carmaker fell 1 percent to 510 yen in Tokyo trading, capping gains for the year to 59 percent. The results were announced after the close of trading.
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