Nissan said it will cut 20,000 jobs and post its first loss in nine years as the global recession cripples car demand and a stronger yen ravages the value of overseas earnings.
Nissan expects a net loss of 265 billion yen ($2.91 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. It also scrapped its second-half dividend.
The company’s January sales in the US, its biggest market, plunged 31 per cent as demand for Altima sedans and Xterra sport- utility vehicles dried up.
Chief executive officer Carlos Ghosn’s elimination of 9 per cent of the workforce caps an earnings season in which all of Japan’s carmakers slashed forecasts and Sony, Panasonic and NEC all cut workers.
“The economic storm is wreaking havoc on everyone,” said Yuuki Sakurai general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance, which manages the equivalent of $54 billion in assets. “Things could get even worse.”
Car sales in the US have sunk to the lowest level since the early 1980s amid the highest unemployment since 1992, forcing General Motors and Chrysler LLC to seek government aid.
Industrywide sales in Japan fell the most in 35 years last month. The country is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 per cent in December and unemployment surged.
“Our worst assumptions on the state of the global economy have been met or exceeded,” said Mr Ghosn. Declining consumer confidence and lack of access to credit are “the most damaging factors,” he said.
Toyota Motor, the world’s largest automaker, last week said its loss will be three times earlier estimates.
Honda Motor, Japan’s second-largest carmaker, slashed its full- year net income forecast 57 per cent 80 billion yen on January 30th, compared with a previous estimate of 185 billion yen.
Mazda, Mitsubishi and Fuji Heavy Industries have also forecast full-year losses.
Bloomberg