Exclusive: Nissan shakes off virus woes in China sales with rebound in April - sources

BEIJING (Reuters) - Nissan Motor Co's 7201.T vehicle sales in China this month almost recovered to the prior year's level after a coronavirus-related 45% plunge in March, two sources with knowledge of the Japanese automaker's preliminary data said.

FILE PHOTO: A Nissan logo is pictured at Brussels Motor Show, Belgium, January 9, 2020. REUTERS/Francois Lenoir

The data reinforces growing optimism that the world’s biggest car market is stabilising fast as businesses return to normal in China, making it a rare bright spot as most dealerships in Europe and the United States remain shut.

Nissan’s vehicle sales in China, which include Nissan, Infiniti and China-only brands, as well as light commercial vehicles, contracted just “a few percent” in April from a year earlier when it sold roughly 121,000 vehicles, said the people who saw the data.

Sales of the Nissan brand alone showed a “small growth”, one of the people said.

Nissan declined to comment on the April sales numbers but said the data would be made public on May 11. The people declined to be named as the data are preliminary and not yet public.

The estimated results mark a sharp improvement from a 44.9% plunge in March and 80.3% fall in February that Japan’s No.2 automaker previously reported.

“We’re putting all efforts on China and the U.S. market to regain momentum,” said the other source, adding Nissan was ramping up marketing and offering incentives to dealers.

He also pointed to what he described as nascent signs of “changing views” on public transit and ride-hailing services resulting from the coronavirus outbreak which might have encouraged some consumers to shun such services and opt to buy cars instead.

In China, Nissan makes cars with state-owned Dongfeng Motor Group 0489.HK. The Japanese automaker said in January it aimed to sell 1.6 million vehicles in China this year.

Nissan’s improving sales also follow upbeat data released by an auto industry group in China, cementing optimism that momentum that started building from the start of this month has gained a solid foothold.

The China Passenger Car Association said this week that sales of passenger cars jumped 12.3% between April 20 and 25, helping to limit the drop in sales in the first 25 days of the month to 1.6% from the same period a year earlier.

China’s auto sales tumbled 43.3% in March in their 21st consecutive month of decline, but improved from a 79% plunge in February.

A solid business recovery in China would offer much needed relief for Nissan, which had been reeling from falling global sales even before the pandemic due to an aggressive expansion plan pursued by ousted leader Carlos Ghosn.

A third company insider said market share was a more critical focus for Nissan than volume as it deals with the effects from the coronavirus epidemic.

He said Nissan’s chief operating officer Ashwani Gupta, who chairs the company’s internal China management committee, had already shifted Nissan’s strategy.

“He wants Nissan’s China team to focus on market share without jeopardising profitability, so when the market starts growing again, you get the volume, too,” the source said.

The source added that such a strategy was critical as Nissan waited for new and redesigned products for the China market.

The pandemic has piled on pressure to renew efforts to downsize, and Nissan’s management has become convinced that the company needs to be much smaller, arguing for a recovery plan that will likely cut 1 million cars from its annual sales target, Reuters reported this month.

Nissan expected on Tuesday an annual operating loss of as much as 45 billion yen ($420 million) for the year ended March 31, its first such loss since the 2008 global financial crisis.

Reporting by Norihiko Shirouzu; Additional reporting by Yilei Sun in Beijing; Editing by Muralikumar Anantharaman and Edmund Blair