On Tuesday, Nissan Motor Co raised its full-year profit outlook as the company squeezed out more profit per vehicle. However, Nissan said that access to scarce semiconductors would be the key driver of future earnings growth.
As in the case of other big global carmakers, the company had no other option but to reduce vehicle output, even amid robust demand in key markets such as China and the United States. Nissan was not able to make more cars due to a chip shortage caused by Covid-19 supply chain disruptions. We also have to mention the competition for the component from a range of industries.
Still, some automakers expect chip shortages to ease in the second half of the year. However, some automotive chipmakers cautioned that a recovery could take more time.
Nissan and its plans
Nissan raised its operating profit forecast for the year to March 31 by 17% to 210 billion yen ($1.82 billion) supported by cost cutting that improved margins and weaker yen that helped to boost the yen value of overseas sales.
The company’s new full-year profit outlook is higher than a mean 194 billion yen profit based on estimates from analysts.
The scarcity of cars for consumers to buy also means that Nissan has been earning more per car, as it longer needs to offer large incentives to attract customers.
Nissan maintained its global full-year sales target of 3.8 million vehicles after reducing it from 4.4 million in November.
Operating profit for the last quarter of 2021 almost doubled to 52.2 billion yen ($451.8 million). Retail volume in the fourth quarter shrank by 16.3% from a year ago to 904,000 vehicles, with the biggest drop in the United States, which declined 19.8%.
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