Nissan Posts Record Net Profit, Driven by Sales Growth in US and China

Strategic Insights -

Nissan, Japan's second-largest carmaker, achieved a record net profit of 512.3 billion yen ($4.8 billion) for the fiscal year ended March 31, marking a 1.7 percent increase from the previous year. The company's profit growth was driven by strong sales of its luxury Infiniti sedans and an expanded line of light trucks, particularly in the United States and China. Nissan's operating profit of 861.2 billion yen, up 4.4 percent, gave it an operating profit margin of 10 percent, the highest in the industry.

Key Takeaways:

  • Nissan's net profit rose 1.7 percent to a record 512.3 billion yen ($4.8 billion) in the fiscal year ended March 31, driven by strong sales in the US and China.
  • Revenue increased more than 15 percent to 8.58 trillion yen, while unit sales worldwide grew 11 percent to 3.39 million vehicles.
  • Nissan sold 1.01 million vehicles in the US, up 11 percent from the previous year, with strong sales of the Altima and Infiniti G35 sedans.
  • The company achieved an operating profit margin of 10 percent, the highest in the industry, and reiterated its goal to expand global sales to 4.2 million vehicles by March 2008.
  • Nissan expects a net profit of 517 billion yen for the new fiscal year, up just under 1 percent from the previous year.
  • The company faces challenges such as higher steel and oil prices, rising interest rates, and the expanded duties of its chief executive, Carlos Ghosn.

Statistics:

  • Net profit: 512.3 billion yen ($4.8 billion), up 1.7 percent from 503.7 billion yen year earlier.
  • Revenue: 8.58 trillion yen, up over 15 percent from 7.43 trillion yen year earlier.
  • Unit sales: 3.39 million vehicles, up 11 percent from 3.05 million vehicles year earlier.
  • Operating profit: 861.2 billion yen, up 4.4 percent from 823.2 billion yen year earlier.
  • Operating profit margin: 10 percent, the highest in the industry.

Sources:

  • "Nissan Profits Rise 1.7%." NY Times, 2006, Sec A, p. 3.
  • "Nissan Posts Record Profit." Bloomberg News, 2006.
  • "Nissan Keeps Vroom but Faces Challenges." New York Times, 2006, Sec B, p. 1.