YOKOHAMA, Japan – Nissan Motor Co. reported a 70 percent drop in operating profit in the latest quarter as falling sales, unfavorable foreign exchange rates and rising costs undercut earnings, though the company said it is seeing improvements in North American performance.
Operating profit dropped to 30.0 billion ($278.0 million) in fiscal second quarter ended Sept. 30, the scandal-tainted Japanese automaker said Tuesday in its quarterly results.
Net income fell by more than half to 59.0 billion ($546.8 million) in the July-September period.
Nissan's revenue decreased 6.6 percent to 2.63 trillion yen ($24.4 billion) in the three months, and global retail volume declined 7.5 percent to 1.27 million vehicles.
Despite the plunge in parent-company performance, Nissan's business in the key U.S. market showed signs of a correction, Corporate Vice President Stephen Ma said in a briefing at Nissan’s global headquarters.
Incentive costs were coming under control, dealer inventory was being reduced and regional operating profit was buttressed by reduced selling expenses, Ma said.
"We are already starting to see improved quality of sales in the U.S., which is our primary focus right now," said Ma, who takes over as Nissan's CFO from Dec. 1, as part of a new management team led by incoming CEO Makoto Uchida.
"We are not chasing market share. We are not chasing volume. We are really focused on sustainable long-term growth," Ma said.
Heavy discounting and fleet sales, particularly in the U.S., have left Nissan with a cheapened brand image and low vehicle resale value as well as dented profitability.