YOKOHAMA, Japan (Reuters) - Nissan Motor Co (7201.T) projected a 22.6 percent rise in net income for its current business year as the weakening yen allows Japanese carmakers to cash in overseas profits at more favorable rates.
But Carlos Ghosn, who heads both the Japanese firm and France’s Renault SA (RENA.PA), said that while Nissan’s annual global retail sales volumes will reach a record, he expects the European market to face another tough year.
“I think 2013 is going to be tough and I don’t foresee any growth in Europe probably before the end of (Nissan‘s) mid-term plan, which means not before 2016, or even later,” Ghosn told a news conference at Nissan’s headquarters in Yokohama.
“We think the European consumer lacks of confidence. The European consumer is confused, he doesn’t know when Europe is going to get out of this crisis and until he sees or understands what’s going on in Europe, I don’t think (he‘s) going to buy cars,” he said.
Nissan, Japan’s second biggest automaker by sales volume, expects global retail sales of 5.3 million vehicles in the business year that ends in March 2014, up from 4.9 million last year, when it eked out a 1.4 percent year-on-year rise.
That paled in comparison with increases in the same period for Toyota, which rose 16.3 percent, and Honda, which grew 32.2 percent.
Of the Japanese automakers, Nissan is the most exposed to China. The world’s biggest auto market accounts for about a quarter of its global sales.
A sales slowdown there last year as customers spurned Japanese brands in response to a diplomatic spat between the countries has led to uncertainty about whether Nissan will be able to achieve its goal of winning 8 percent global market share by March 2017, with an operating margin of 8 percent.
Ghosn was bullish, saying year-on-year sales in China were higher in April and that he expects a full recovery in China sales by the end of 2013, and that the overall mid-term plan is on track.
The company said on Friday it expects to make a net profit of 420 billion yen ($4.23 billion) in the year to March 2014, below an average forecast of 475.1 billion yen made by 19 analysts surveyed by Thomson Reuters I/B/E/S.
Its profit growth rate forecast was also below Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T), partly because Nissan, which tends to use more imported components for parts in the cars it makes in Japan than do its rivals, is less able to cash in on the weakening yen.
In January-March, Nissan net profit’s grew 46.1 percent to 110 billion yen ($1.11 billion), above an average forecast of 100.8 billion yen net profit made by five analysts surveyed by Thomson Reuters I/B/E/S.
($1 = 99.3050 Japanese yen)
Reporting by Yoko Kubota and James Topham; Editing by Daniel Magnowski