TOKYO — Nissan Motor Cop. reported a record annual loss on Tuesday as the coronavirus pandemic hit vehicle sales and a global shortage of semiconductors forced the automaker to cut production.
Nissan said in a statement that its annual operating loss grew in the year ended March 31 to 150.65 billion yen ($1.38 billion) from a 40 billion yen shortfall in the previous year. The automaker has not made a profit since the year ended March 2019.
However, it beat its February forecast of a 205 billion yen loss because of a sales recovery in China and cost cutting.
The global auto industry has been grappling with a chip shortage since the end of last year, exacerbated in recent months by a fire at a chip plant in Japan and blackouts in Texas, where a number of chipmakers have factories.
Nissan, which is pulling back from the global expansion pursued by ousted Chairman Carlos Ghosn, had to cut production of its best-selling Note compact car in Japan and make short-term output adjustments at its North American operations last quarter due to the chip shortage.
CEO Makoto Uchida has predicted that the company will return to profitability this year as it pushes to cut costs and rouse stagnating consumer interest with new models. But Nissan’s performance amid the pandemic relative to peers such as Toyota Motor Corp. and the toll the chip shortage is weighing on the beleaguered automaker’s ability to produce cars highlights lingering fragility.
While Nissan’s business transformation is making steady progress, there is “continued business risk due to semiconductor supply shortage and raw material price hike in this fiscal year,” the company said in its statement Tuesday. “While working to minimize the impact of these risks and factoring the potential impact, Nissan has set operating profit forecast at plus or minus zero.”
Nissan is one year into a turnaround plan that involves churning out 12 new models in the 18 months through November, slashing global production capacity and reducing incentives to boost margins. Recovering demand for cars is boosting sales of new models such as the Rogue crossover and global deliveries increased year-on-year in February. In March, they were up 51 percent, led by China where Nissan gets more than 35 percent of its sales.
Sales for the recently ended fiscal year however were down 12 percent year-on-year, dragged lower by losses in the first half when Covid lockdowns disrupted global markets. The semiconductor shortage is also expected to cost the auto industry millions in car sales this year and Nissan “is likely to struggle earlier and longer than others,” Bloomberg Intelligence analyst Tatsuo Yoshida said.
