Nissan might overtake Toyota and become Japan’s most profitable carmaker

Article by Christian A., on June 29, 2011

Nissan Motor Co. is now targeting an operating income of JPY460 billion ($5.7 billion) in the fiscal year ending March 31, 2012, with the company’s CEO Carlos Ghosn making a bold pronouncement that "Nissan is unleashed" and that the company is launching a plan “with no handicap” and is fully “on the offensive.”

Ghosn is determined to make Nissan the most profitable vehicle manufacturer in Japan for the first time since 1992. Anticipating increased worldwide production, Ghosn had the company stocking electrical components even before the March 11 disaster that devastated Japan.

This allowed the company to recover from the disaster quicker than its competitors Honda Motor Co. and Toyota Motor Corp. In North America, the company lost only a week of output while its competitors have yet to resume full production.
For the fiscal year ending March 31, 2012, Toyota expects operating income to be at JPY300 billion while Honda estimates it to be JPY200 billion.

According to Bloomberg data dating way back 1992, this would be the first time that Nissan will outperform its two major rivals. Earlier this week, Ghosn announced a six-year mid-term business plan that targets an 8 percent operating margin and an 8 percent global market share.

In May 2000, just after Nissan obtained its largest annual loss, Ghosn informed Bloomberg News that he would lead a return to profit by March 2001, which he obtained. According to Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California, Ghosn has earned the right to brag.

Ghosn was known for his "Nissan Revival Plan" which was announced in October 1999. The Nissan Revival Plan called for cutting 21,000 Nissan jobs, mostly in Japan as well as shutting five Japanese factories. It also called for a reduction in the number of suppliers and shareholdings.

In the fiscal year ended March 31, 2011, Toyota posted JPY18.99 trillion in net revenues, representing a 0.2 percent hike over the fiscal year ended March 31, 2010. Around JPY17.82 trillion of these were derived from its automotive operations. After costs and expenses totaling JPY18.53 trillion in the fiscal year ended March 31, 2011, Toyota logged JPY468.28 billion operating in operating, which represents 2.5 percent of net revenues. The operating profit for the fiscal year ended March 31, 2011 was around 217.4 percent than posted in the previous fiscal year, at JPY147.52 billion.

Its net income for the fiscal year ended March 31, 2011 was JPY408.18 billion, which is around 93.3 percent higher than the net income in the previous fiscal year, tagged at JPY209.46 billion.

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Topics: nissan, toyota

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