The first quarter of 2019 was not a pretty one for Nissan it seems. Recently, the Japanese automaker released its financial results for the first three month period which ended in June 30, 2019.
Based on the numbers alone, Japan's no.2 automaker posted low figures across the board. From having an operating profit of JPY 109.1 billion last year in Q1, it plummeted to just JPY 1.6 billion year-on-year. This resulted in a 98.5% drop in profits. With it, Nissan's net income also took a hit as it went from JPY 115.8 billion last year to just JPY 6.4 billion, a 94.5% drop in income.
In its first quarter fiscal year, Nissan's global total industry volume decreased 6.8% to 22.5 million units. Meanwhile Nissan's global unit sales went down 6% to 1.23 million units. In Japan alone, sales are down 2.6% to 126,000 units. Meanwhile in Europe (including Russia), sales fell to 16.3% or 135,000 units which translated to a market share of just 2.5%. Other markets like in Asia, Oceania, Latin America, the Middle East, and Africa, Nissan's sales decreased to 13.1% to 174,000 units.
Aside from reporting a near 99% loss in profit and decrease in sales around the world, the company is also planning to cut 12,500 jobs in an effort to restructurize the company and optimize cost structures. Enhancing brand value, as well as refreshing the core model lineup are also on the agenda in order to bring back more profits to the company. There are even reports going around that Nissan may halt operations of certain factories just so they can minimize profit loss.
While Nissan's recent fall from grace can simply be attributed to an aging lineup and uneven management, another reason the company is experiencing hardships as of late can be traced to the recent Carlos Ghosn fiasco, as well as the exodus of key executives from the company in the past few months.
Then there was also the issue whether the Renault-Nissan-Mitsubishi Alliance will falter or disband. However, that issue has been put to bed after the Alliance announced last December 2018 that they will stay the course. In fact, the Alliance forged a much stronger bond last March 2019 that saw the formation of a new operating board that consists of three major stakeholders that will handle decision-making instead of Ghosn's one-man rule.
But in order to prevent future executive misdeeds happening at Nissan, the automaker created a special committee that is aimed at improving corporate governance in the company. The purpose of the committee is to provide recommendations on how to improve the company's approval process for determining direction compensation and to create a 'healthy state of governance as the foundation for suitable business,'.
Despite the company's woes across the globe, here in the Philippines the company is actually doing quite well. Back in 2018, the automaker was able to post a 40% growth on a market that was experiencing a rough year. They were able to sell a total 34,952 units which made them the only brand to grow by double digits following the increased excise tax and rising fuel prices.
The growth also allowed Nissan to increase their market share in the country by 8.7%. The main contributor to Nissan's growth in the country was the Navara pickup truck which accounted for the company's 46.2% sales in 2018. Other models contributed heavily to the company's growth are the Urvan (19.5%), Almera (17.5%), and the Terra (11.9%)