Nissan unfazed by Trump’s Mexico factory outbursts as sales accelerate

Japanese car maker delivers more than 1 million vehicles and says it and Daimler will continue construction of Mexico plant despite US president's threats.

 Nissan Patrol V6 with Abu Dhabi skyline behind. The Japanese car maker has seen earnings rise. Vidhyaa / The National
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Nissan reported Thursday that its October-December profit rose 3.5 per cent from last year as vehicle sales climbed in all major markets.

The company also said it is pressing ahead with plans for a new plant in Mexico, despite the US president Donald Trump rapping rival Toyota over a factory in the Latin American country.

Nissan and Daimler broke ground in 2015 on the facility in Aguascalientes in central Mexico, saying they would invest about US$1 billion on a factory that would make vehicles for their luxury Infiniti and Mercedes-Benz brands.

Nissan said the plant is on track to start producing vehicles this year.

The car maker has several other production plants in Mexico, where it makes more than 800,000 vehicles annually.

“As of today we are on track, in line with the schedule and by the end of the fiscal year our new Infiniti cars will be produced there,” the Nissan vice president Joji Tagawa said on Thursday, referring to the new plant.

The comments came as Nisshinbo, another top Japanese firm, said it has dropped Mexico as a possible location for its new auto parts factory, citing Mr Trump’s protectionist outbursts.

Nissan, based in the Japanese port city of Yokohama, reported a fiscal third quarter profit of ¥131.7 billion (Dh4.4bn), up from ¥127.2bn the same period a year ago.

Nissan, which makes the Patrol 4x4 – long a favourite in the UAE – the March subcompact, Leaf electric car, sold more vehicles in Japan, North America, Europe and Asia for the quarter compared with the previous year.

The company sold 1.09 million vehicles worldwide during the quarter, up from 1.02 million.

Quarterly sales slipped 2.2 per cent to ¥2.94 trillion. The car maker kept its annual forecasts unchanged, projecting ¥525bn profit, up slightly from the previous fiscal year, on ¥11.8tn sales, down 3.2 per cent.

Nissan also announced financial results for the nine-month period to December 31.

“In the first nine months of the fiscal year, Nissan generated an operating profit of ¥503.2bn, which represents a 6.1 per cent margin on net revenues of ¥8.26tn,” said Carlos Ghosn, the chief executive. “Although these results reflect continued currency headwinds, we remain confident of achieving our fiscal year guidance.”

However, outside of its major markets such as the US, Europe Russia and China, the company fared less well. In regions including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales decreased 3.9 per cent to 596,000 units.

“On a constant currency basis, operating profit rose 30.1 per cent to ¥764.6bn, equivalent to an 8.1 per cent profit margin. Our underlying performance was enhanced by solid product demand in the US, China and western Europe, along with the continued benefits of our strict cost controls and synergies from our Alliance strategy.”

“We expect to deliver solid earnings and strong free cash flow generation for fiscal year 2016,” said Mr Ghosn.

Nissan also stuck to its earlier expectation to sell 5.6 million vehicles for the fiscal year ending March 31, up 3 per cent from the previous year.

Nissan, which is allied with Renault of France, has become the top shareholder in scandal-plagued Japanese rival Mitsubishi Motors, which was found cheating on mileage tests to inflate fuel economy figures for its minicar models.

Nissan can hope to leverage Mitsubishi’s strengths in markets such as South East Asia.

* Agenciess

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