Nissan pares car sales forecast on tougher China competition

Nissan lowered its annual car sales outlook due to weak demand and mounting competition in China, where buyers are shifting to locally made electric vehicles faster than it expected.

The Japanese manufacturer now projects at most 3 million vehicle deliveries this year, from 3.15 million previously, it said Wednesday. Nissan reported second-quarter operating profit that came in significantly below analyst expectations.

“China remains our biggest challenge,” Chief Executive Officer Ivan Espinosa told reporters in Yokohama.

The results show how far the embattled Japanese carmaker still has to go in its efforts to come back from its worst financial crisis. Nissan has started a broad cost-cutting campaign that includes cutting jobs and shutting down factories. But it still faces sizeable debt obligations and is struggling to compete with the industry’s shift toward EVs with complex software, particularly in China.

Nissan’s sales in the world’s biggest car market fell 15% during the first half of the fiscal year. The company is looking to turn things around by adding more EVs and plug-in hybrid cars to its lineup, some of which will be exported to other markets. 

Business was better elsewhere. Deliveries increased 6.3% in Japan and 2.1% in North America — regions where the shift to EVs is happening at a slower pace. 

Nissan’s operating profit came in at ¥2.12 billion ($13.3 million) for the three months through September. That’s well below the ¥49.3 billion projected by analysts. The company maintained its full-year financial forecast on expectations that profitability will improve in the second half due to new models and higher sales volumes.

Nissan will announce a new business strategy in February that will go beyond its current restructuring plan, Espinosa said.