Nissan Motor Co, Japan’s third-largest automaker, will cut 20,000 jobs after predicting a loss this fiscal year as the recession cripples vehicle demand and a stronger yen cuts the value of earnings.
Nissan expects a net loss of ¥265 billion (US$2.91 billion) for the year ending March 31, compared with its October estimate of ¥160 billion in net income. It will post an operating loss of ¥180 billion, down from an earlier forecast of ¥270 billion.
Nissan’s sales in the US last month, its biggest market, plunged 31 percent as demand for its Altima sedans and Xterra sport-utility vehicles dried up amid the highest unemployment since 1992.
PHOTO: AFP
“The economic storm is wreaking havoc on everyone,” said Yuuki Sakurai, general manager of financial and investment planning at Fukoku Mutual Life Insurance Co in Tokyo. “Things could get even worse.”
Car sales in the US have sunk to the lowest level since the early 1980s, forcing General Motors Corp and Chrysler LLC to seek government aid. Nissan, alone among Japan’s automakers, is also asking for a federal loan under a US program for fuel-efficient autos.
Chief executive Carlos Ghosn has called for government aid for automakers. The company may apply to Japan’s government for low-interest loans as sales in its home market collapse.
Industry-wide sales in Japan fell the most in 35 years last month. The country is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December and unemployment surged.
Nissan, 44.3 percent owned by Renault SA, posted a net loss of ¥83.2 billion for the quarter ended December. The firm was expected to lose ¥129 billion in the third quarter, a median estimate of analysts surveyed by Bloomberg showed.
Nissan fell 5.8 percent to ¥261 at the close of trading in Tokyo before the earnings announcement.
The company is cutting Japan production by an additional 64,000 vehicles this month and next month, it said on Jan. 15. With the reduction, Nissan’s domestic production will total about 1.1 million vehicles for the year ending March 31.
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