* Slow sales, high incentives cloud mid-term share,
* Apr-Dec operating profit margin 4.1 percent, narrower than
* Oct-Dec net profit rises 56.8 percent to 84.3 bln yen,
* Keeps FY forecast at 355 bln yen vs 364.2 bln yen analyst
(Recasts with executive comments)
By Yoko Kubota and Maki Shiraki
YOKOHAMA, Japan, Feb 10 Nissan Motor Co
could sacrifice its global market share goal to reach its
mid-term profitability target after slower-than-expected sales
in its biggest markets left its profit margin the tightest among
Japanese car makers.
Nissan's six-year plan ending 2017, in which it aims to
boost its market share to 8 percent from 6 percent, has been
shaken by a Sino-Japanese diplomatic dispute knocking sales in
China, and manufacturing difficulties hitting U.S. product
Japan's second-largest carmaker by global sales volume after
Toyota Motor Corp also aims for operating profit
equivalent to 8 percent of revenue by March 2017 through scaling
back buying incentives in the United States and cutting costs
with alliance partner Renault SA.
Nissan, on reporting an 18.4 percent rise in April-December
net profit on Monday, said its nine-month operating margin was
4.1 percent, down from 4.5 percent a year earlier. That compared
with 6.6 percent at Honda Motor Co and 9.7 percent at
"If we can meet our 8 percent profitability target, then it
is fine if the share is a little lower and the company is moving
to emphasise profitability," Corporate Vice President Joji
Tagawa told reporters after Nissan released earnings.
Nissan reported nine-month net profit of 274.1 billion yen
($2.68 billion). For October-December, profit rose 56.8 percent
to 84.3 billion yen compared with a 57.1 billion yen mean
estimate of seven analysts in a Thomson Reuters I/B/E/S poll.
The quarterly net profit growth was the steepest in almost
two years as a weaker yen allowed Nissan to convert money made
overseas at a more favourable exchange rate, and as sales
improved in China where some consumers boycotted Japanese goods
following a territorial row in September 2012.
Shares of Nissan ended Monday 0.1 percent higher before the
earnings release compared with a 1.8 percent rise in the
The maker of Infiniti and Datsun brands left its profit
outlook for the full year ending March at 355 billion yen, or
4.1 percent more than the year prior, compared with analysts'
364.2 billion yen estimate.
Nissan cut the outlook three months ago by nearly 20
percent, citing heavy investment in new plants and product
"We expect to see a significant improvement in our financial
performance in the last three months of our fiscal year," Tagawa
said, adding that he expects steady sales in Japan, China and
the United States.
Nissan offers more incentives to buy its cars in the United
States than its Japanese and South Korean rivals, squeezing
In October-December, Nissan's incentives knocked an average
$2,562 from each vehicle's retail price compared with $1,952 for
Toyota, $1,799 for Honda and $1,759 for Hyundai Motor Co
and affiliate Kia Motors Corp, according
to industry researcher Autodata.
In January, Nissan's U.S. sales rose 12 percent on year to
90,470 vehicles, helped by strong sales of the redesigned Rogue
crossover sport utility vehicle.
Based on accounting standards in place when setting mid-term
targets, Nissan on Monday said April-December operating profit
margin would have been 4.7 percent, and that it would assess the
targets on the basis of the previous standards.
($1 = 102.2150 Japanese yen)
(Reporting by Yoko Kubota; Editing by Christopher Cushing)