May 14 (Bloomberg) -- Nissan Motor Co. Chief Executive Officer Carlos Ghosn said the automaker’s premium Infiniti unit will contribute significantly to group profit if the yen weakens further to its “normal” historical level.
The strong yen had erased Infiniti’s profit contribution to Nissan over the past two years, Ghosn told reporters today at an event to mark the start of production of its Q50 sedan. The luxury unit contributed less than 1 percent to the Yokohama, Japan-based automaker’s operating profit, he said.
“If the new trend on the yen hopefully will continue to bring back the yen to the normal historical level of 110 yen to the dollar, Infiniti will bring back a very significant contribution to the operating profit of Nissan,” Ghosn said in Tochigi prefecture, north of Tokyo.
Nissan this month reported the slowest annual profit growth among Japanese automakers as success in China backfired when a political dispute triggered a wave of anti-Japan sentiment in the world’s biggest car market, outweighing the benefits from a plunge in the yen.
Nissan forecast net income will rise 23 percent to 420 billion yen ($4.1 billion) in the year ending March, the highest in six years. The company gains about 15 billion yen in operating profit with every one-yen drop against the dollar, according to the company.
Japan’s currency rose from near its lowest level in more than four years against the dollar, strengthening 0.3 percent to 101.54 per dollar at 1:23 p.m. in Tokyo from yesterday.
Nissan based its profit outlook on an exchange rate of 95 yen against the dollar, and 122 yen versus the euro. It produced about 22 percent of its cars at home last fiscal year, compared with 44 percent at Toyota Motor Corp.
Infiniti is targeting to double its lineup in the next few years, President Johan de Nysschen said today. The automaker’s operating margin will improve to Nissan’s level by next year as the yen weakens, he said, without elaborating.
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