Abu Dhabi, UAESunday 25 August 2019

Nissan says report of output cut 'completely incorrect'

Denial comes after the Nikkei said Nissan would cut its global production by about 15 per cent for the current fiscal year ending March 2020

Nissan has strongly refuted claims it plans to cut production. AP
Nissan has strongly refuted claims it plans to cut production. AP

Nissan said on Friday a report by the Nikkei that it would slash production this year was "completely incorrect" and that it had lodged a complaint with the business daily, in an unusually strong denial of a media report in Japan.

The comment came after the Nikkei said Nissan would cut its global production by about 15 per cent for the current fiscal year ending March 2020, according to Reuters.

The move would mark a shift away from the aggressive expansion campaign promoted by ousted former chairman Carlos Ghosn, the paper said.

"The details reported in this story are completely incorrect, and Nissan has voiced its strong objection to the Nikkei," the Japanese car maker said on its website.

"Nissan's production plan for the current fiscal year will be disclosed on May 14, when the company announces its financial results for the previous fiscal year," said the maker of the Rogue 4x4 and Altima saloon.

The Nikkei, which also owns Britain's Financial Times newspaper, confirmed it had received the complaint from Nissan. It said it would continue to cover the issue and promptly report all the facts once they become clear.

The newspaper had earlier reported that Nissan aimed to produce about 4.6 million units in fiscal 2019, citing plans being communicated to the automaker's suppliers. The move was likely to impact earnings and could cast a pall over Nissan's alliance with French automaker Renault, the Nikkei said without elaborating.

That would be the steepest production cut in more than a decade by the Japanese car maker, as it battles weak sales in overseas markets including the United States where it plans to scale back sales operations, according to the Nikkei.

Earlier this year, Nissan, which has been battling falling sales, lowered its operating profit forecast for the current fiscal year to ¥450 billion (Dh14.69bn), 22 per cent lower than a year earlier. It would be Nissan's lowest profit since 2013.

Japanese companies typically respond to media reports by saying they were not the source of the information and, depending on the content of the report, that they may be considering various options and that nothing had been decided.

It is rare for a Japanese firm to say it has issued a strong rebuke to a media outlet.

Shares in Nissan, mired in a financial misconduct scandal involving Mr Ghosn and the company itself, closed down 2.2 per cent on Friday, versus a 0.5 per cent rise in the broader market.

The Nikkei report came on the same day broadcaster NHK said Mr Ghosn will be indicted on a fresh round of charges on April 22 as Japanese prosecutors pursue their case against him.

Prosecutors will indict Mr Ghosn as soon as Monday on new charges of aggravated breach of trust, the national broadcaster said without identifying sources. Monday is the deadline for the former auto executive’s current detention period. The charges are related to activities in the Middle East that funnelled Nissan’s money for Mr Ghosn’s personal gain, NHK said.

Former Nissan chairman Carlos Ghosn. The firm says it refutes media reports of production cuts. Reuters
Carlos Ghosn may face new charges. Reuters

Mr Ghosn, who was arrested for the first time in November, is being held in a Tokyo jail. A new indictment will keep Mr Ghosn detained for longer, according to Bloomberg.

The former chairman of Nissan alliance partners Renault and Mitsubishi Motors has denied the allegations as well as previously filed charges accusing him of falsifying financial information and breach of trust.

Updated: April 20, 2019 01:36 PM

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