TOKYO - 'Six months ago, it was considered 'Mission Impossible,'' said Carlos Ghosn.
Now, the president of Nissan Motor Co. says of a turnaround at the financially troubled automaker: 'I'm not optimistic or conservative. I'm confident, which is different.'
Ghosn, who has led Nissan's painful restructuring after joining the company from Renault SA last July, recently met with a small group of reporters following the release of horrific results for the fiscal year that ended March 31.
The automaker said its net loss rose to the equivalent of $6.5 billion at current exchange rates from $261.1 million a year earlier, on a 9.2 percent drop in revenue to $56.3 billion. The huge loss resulted from $6.7 billion in one-time restructuring charges, however.
Ghosn said the write-off clears the way for the carmaker's revival.
His revival plan, which entails closing plants, cutting Nissan's supply base, slashing costs and paring Nissan's huge debts, 'is going faster and having a deeper impact than planned,' Ghosn said.
'It will result in stronger performance both in growth and cost reductions. 'I'm confident ... for a number of reasons' that Nissan will return to the black in the current fiscal year for only the second time in nine years, he said.
Nissan forecasts an operating profit of $1.04 billion and a net profit of $565 million for the fiscal year ending March 31, 2001, the result of higher sales in key markets and progress in cost cuts and debt reduction.
Nissan predicts its European sales will rise 9.7 percent this fiscal year, even as the European market slips 1.3 percent. The European range will be boosted by the Almera Tino minivan and a new executive car to replace the QX/Maxima, among other models.
In the year just ended, Nissan and other Japanese carmakers were hurt by a strong yen, which reduced the yen-based revenues and profits from dollars and euros taken in overseas. Still, Nissan offset much of that by a strong showing in North America, cost cuts and debt reduction.
Net automotive debt dropped to $12.7 billion at the end of the latest fiscal year from $17.6 billion a year earlier, bringing a 30 percent reduction in interest payments.
In the current fiscal year, Ghosn said he expects Nissan to sell 1 million cars and trucks in North America, up 14.4 percent, even though he sees the overall market declining 4.1 percent.
Ghosn said Nissan has not reached its full sales potential in the USA because it has been slow to expand its light-truck lineup. But the automaker is adding capacity in Smyrna, Tennessee., for the hot-selling Xterra sport-utility and Frontier pickup.
Nissan's share of the US market in the first four months of 2000 rose to 4.1 percent from 3.6 percent a year earlier. Moreover, Nissan is selling a more profitable mix of vehicles there.
In 1999, high-margin light trucks accounted for 42.5 percent of Nissan's US sales, up from 34 percent in 1998.
Inventories are finally in line, also. In the January-March quarter, Nissan reduced its North American inventories 30 percent. A 21 percent inventory cut in Japan brought worldwide inventories down 21 percent from the previous quarter.
Ghosn insisted that Nissan is not looking for other markets just to hold steady while North America provides all of the profits. Nissan expects to be 'enhancing profit everywhere,' he said. 'The biggest change will come from markets that deteriorated the most.'
It sees the Japanese market, excluding minis, rising 2.0 percent to 4.1 million, although its own sales will ease 0.4 percent to 755,000.
Over the medium term, Ghosn is counting on new models to boost sales. Nissan will introduce four new models this fiscal year, five the next, and 13 the year after that, he said. To support that new-product drive, Nissan is raising its capital spending from 3.7 percent of sales in the fiscal year just ended to 5.0 percent of sales this fiscal year.
It will raise the portion of that spending devoted to product development to 60 percent from 45 percent over the past two years, even as it cuts product-development costs by 30 percent, Ghosn said.