Nissan Suffering Setback from Thailand Troubles

The third-biggest carmaker in Japan by revenues, said that sales in the country dropped by more than half year on year to 21,700 vehicles in the three months to December 31 as it reported quarterly results on Monday.

Japanese carmakers have invested heavily in Thailand, which they have seen as a promising market because of its proximity to Japan and an increasingly affluent population who are familiar with the country’s marques.

But a prolonged anti-government street protest movement in Bangkok and an end to state incentives to buy vehicles has soured the picture of late. Honda, Mazda Motor and Mitsubishi Motor have all warned of falling sales in the country, while Toyota has warned that the crisis could affect its plans for $609m of further investment in Thailand.

The unrest in Thailand compounds existing problems for Japan’s car manufacturers, particularly the end of a tax break for first-time car buyers introduced to spur sales following flooding in 2011.

Nissan’s strategy is focused on an aggressive push into emerging markets in Asia and Africa. It is exhibiting the new Datsun models, reborn as a low-budget brand for the Indian markets at the Delhi auto show this week.

Presenting the results, Nissan’s Joji Tagawa, corporate vice-president, said the drop in the country was “substantial”.

Otherwise the group reported healthy third-quarter results thanks to the combination of the yen’s depreciation and the US economic recovery.

Nissan’s market share in the US, one of its biggest markets, grew 0.4 percentage points to 7.8 per cent, with 930,000 vehicles sold in the nine months to December, an increase of 13.5 per cent compared with the same period the year before.

Overall sales increased 19.7 per cent to Y7.28tn in the nine months to December 31, while net income rose 18.4 per cent to Y274bn. Nissan, which slashed its full-year profit forecast by 15 per cent last November to Y355bn, left its forecast unchanged.

Net income for the third quarter climbed 56 per cent to Y84.3bn, comfortably beating analyst expectations after taking its total car sales for April-December to 3.67m. Together with Renault, the French carmaker with which it operates an alliance and shares a chief executive, Nissan sold almost 8.3m vehicles last year.

Shares in Nissan, which have dropped about 10 per cent over the past year, closed up 0.11 per cent at Y885 before the announcement was made. – By Jennifer Thompson