* April-June U.S. sales up 14 pct
* Nissan's Q1 operating profit up 13.4 pct
* Seeing excessive inventory in China dealerships
(Adds details on U.S. sales boost and airbag recall)
By Yoko Kubota
YOKOHAMA, Japan, July 28 Nissan Motor Co Ltd
aims to boost sales and profitability in the United
States, its biggest market, an executive said, after Japan's
No.2 automaker posted a 14 percent rise in quarterly U.S. sales,
closing in on rival Honda Motor Co.
For the April-June quarter, Nissan posted a 4.3 percent
quarterly operating profit margin for North America, up from the
3.8 percent it booked the same period a year ago. It sold around
350,000 vehicles in the United States, helped by the popular
Altima sedan and Rogue SUV and a new dealership programme.
In the first six months of the year, Nissan's U.S. sales
grew 12.8 percent, making it the sixth-best selling carmaker in
the country. It surpassed Hyundai Motor Co and is
closing in on Honda, whose sales fell 0.8 percent during the
"It's a good thing that the gap between Honda is shrinking,"
Vice President Joji Tagawa told a news conference. "But in the
end, our goal is to boost our own sales and profitability."
Helped by strong U.S. sales, Nissan's April-June operating
profit rose a higher-than-expected 13.4 percent to 122.6 billion
yen ($1.20 billion), exceeding analyst estimates. It stuck with
an operating profit forecast of 535 billion yen for the
financial year ending in March 2015.
NEW PROGRAMME FOR U.S. DEALERS
Nissan's U.S. boost comes after Jose Munoz took over the
company's struggling North American operations in January,
tasked by Nissan's chief executive, Carlos Ghosn, to improve
sales, profitability and market share.
In April, Nissan started a new programme for its dealers
that gives incentives for longer-term sales growth compared to
before, Tagawa said.
"That is helping boost motivation and together with the help
of new cars, we are seeing growth in vehicle volume," he said.
"But North America still has profitability potential and this
just marks the beginning of improvements."
In the United States, Nissan's average incentive offering
per vehicle was $2,323 for April-June, according to data from
TrueCar, the highest among Japanese carmakers, although it has
been declining over the past few months.
Nissan also saw strong sales in China, its second-biggest
market, though Tagawa said it is starting to see excessive
inventory at its dealerships.
In China, Nissan's January-June sales rose 14.6 percent to
about 620,400 vehicles. Tagawa said Nissan could cut wholesale
vehicle volume in the coming months, though it still aims to hit
Nissan, which was one of the many automakers that recalled
cars in June due to potentially explosive airbags supplied by
Takata Corp, expects Takata to pay back all costs
related to the recall, Tagawa said. He declined to disclose the
cost. Nissan recalled 755,500 vehicles globally in June,
expanding a recall from April 2013.
Nissan's shares ended 0.8 percent higher on Monday ahead of
the earnings release, compared with a 0.5 percent rise in
Tokyo's benchmark Nikkei average. Japan's second-largest
automaker is up 13 percent so far this year, outperforming the
benchmark's 5 percent drop.
($1 = 101.87 Japanese yen)
(Reporting by Yoko Kubota; Editing by Kenneth Maxwell and Matt