Nissan forecasts higher profits courtesy of North American demand

Nissan CEO, Carlos Ghosn

Nissan, like Toyota and Honda, is forecasting huge profits this year, courtesy of recovering demand in North America, and a sales surge in China. Nissan, Japan”s third-largest automaker, may realize a boost in net income of over 100 billion yen for the fiscal year ending March 31, as compared to one year previous. Sales could rise to as high as 8.2 trillion yen, from 7.5 trillion. Though these numbers look promising, there are some analysts who feel that this is too conservative of a number. Nissan”s U.S. sales increased 35% in April amidst the sixth straight month of demand growth for autos in America.

The company was able to narrow its Q4 loss to 11.6 billion yen, attributed largely to a 31% surge in U.S. sales, which resulted in Nissan holding a record 9% U.S. market share. Chinese sales were also strong for Nissan, with a 68% increase, for total sales of 243,000. The company aims to produce 900,000 units per year by 2012.

The Leaf is set to go on sale in China in 2011, and so far there are more than 13,000 orders for the car in Japan and Europe. The U.S. Nissan expects to sell 6,000 units in Japan alone this year, and hopes to have capacity to make 500,000 Leaf vehicles per year by 2012 with initial manufacturing efforts in Japan, Britain, Portugal, and Tennessee.

“Although we continue to operate in an environment that is volatile and uncertain, fiscal year 2010 will be an important year in which we launch an affordable, mass-market, all-electric, zero-emission vehicle, extend our presence in emerging markets and develop additional synergies in the Renault-Nissan alliance,” CEO Carlos Ghosn told reporters earlier today in Yokohama.

Nissan may have trouble cutting overall costs, however, as capital spending, marketing costs, and R&D costs are expected to rise. Nissan”s alliance with Renault SA has agreed on a partnership to share development costs, engines and small-car technologies with Daimler AG.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)