Nissan projects the weakest profit in a decade

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Nissan Motor attempting to rebuild its deteriorated reputation over failed corporate governance after the criminal investigation of two former executives, slash its operating profit outlook by a sharp 28 percent for fiscal 2019 to its lowest in a decade.

At a news conference Tuesday at Nissan’s headquarters in Yokohama, CEO Hiroto Saikawa stated operating profit is projected to drop to ¥230 billion from ¥318 billion in fiscal year 2018. Net income is said to drop to ¥170 billion from ¥319 billion.

“The most urgent priority is shaking off the weak performance,” Saikawa stated.

The revenues announcement was verification that management is going through heavy pressure to turn the company around. After the fiscal year 2018 trend, Nissan projected sales would keep increasing in Japan and China but decrease in North America and Europe.

Saikawa also weighed in on automaker’s status in its alliance with Renault SA. The Nikkei newspaper reported previous month that the French automaker had proposed integration of the two companies to Nissan in mid-April. Nissan turned down the proposal, the newspaper reported.

Saikawa acknowledged that differences of opinion are there between him and Jean-Dominique Senard, Renault’s chairman, but he stated they agree on the prioritization of restructuring automaker’s profitability.

As for his course of action, Saikawa repeated that he would not quit.

“As I have said, I want to forge ahead with overhauling the company. … There are no changes to that,” he stated.

Saikawa revealed a range of reform plans dubbed “New Nissan Transformation.” He pledged to improve the automaker’s market share in the United States, where vehicle sales dropped to 1.4 million units in fiscal 2018. The plans consist of expanding electric vehicle sales both domestically and abroad, reshuffle all significant models and introduce over 20 new models.

Saikawa touched on the Carlos Ghosn matter, but largely distanced himself from the scandal and ensured a fresh start.

Nissan has slashed ties with the former executive after it started an internal probe that found he and a former executive, Greg Kelly, engaged in financial misconduct. Ghosn was arrested and indicted on charges of underreporting his compensation and aggravated breach of trust. Both Kelly and Ghosn deny any wrongdoing.

Ghosn has been credited with transforming the automaker from the verge of bankruptcy to a worldwide titan under his leadership.

“Many issues described here today have to deal with a negative legacy inherited from the previous structure,” Saikawa stated. “I would like to apologize for making customers, shareholders and relevant parties worried.”

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