Nissan Forecasts Chinese Sales Will Recover in Three Months
Nissan Motor Co. (7201), the Japanese automaker that sells the most cars in China, expects sales in the world’s largest automobile market to rebound within three months, as demand for Japanese-branded vehicles recovers.
“We’ve seen growth in retail year on year in March and year to date,” Andy Palmer, executive vice president of the Yokohama, Japan-based carmaker told Bloomberg Television’s John Dawson in an interview yesterday. “When we are seeing retail growing, we can be pretty sure that within three months we will see wholesale coming back to a position better than the previous year.”
Nissan sales in China, its largest market, fell 17 percent to 110,000 units last month and declined 5.3 percent in 2012, as anti-Japan sentiment related to a territorial dispute deterred consumers from buying cars made by automakers including Toyota Motor Corp. (7203) Nissan is more affected than other Japanese automakers by a slump in China because it has the largest proportion of sales there among its peers, selling about one in four of its cars in the country.
Nissan reported monthly China sales results based on wholesale, or sales to dealers, which have “no longer than 60 to 100 days” difference to retail sales due to the stock issues, according to Palmer.
Nissan gained 2.6 percent to 912 yen at the close of trading in Tokyo. The shares have gained about 12 percent this year compared with the 22 percent advance in the benchmark Nikkei 225 Stock Average.
Chinese consumers have shunned Japanese products since tensions flared in September over disputed islets, known as Senkaku in Japanese, and Diaoyu in Chinese. Nissan sales slumped by more than 30 percent in the October-to-December quarter in China.
The rise in retail sales allows Palmer to be more bullish than Nissan Chief Executive Officer Carlos Ghosn, who has warned the islets dispute may lead it to review its future investment plans in China.
“It doesn’t affect our strategy going forward at all,” Palmer said. “Obviously we’ve continued to invest.”
The company introduced its Teana sedan on Feb. 26 and is counting on the car to revive sales in the country. Palmer said the fall in March wholesale figures was due to the transition to the new Teana from the old model.
The carmaker will showcase a new concept car, Friend Me, at the Shanghai auto show starting from April 20. Palmer said it will be a hybrid car “dedicated to the youth of China”.
“You can go on social media in the car,” he said. “The way that Chinese youth are using that media is some of the surprise we will show you at Shanghai.”
Nissan, which plans to introduce 15 hybrids by 2016 as sales of the Leaf electric car lagged behind forecasts last year, will sell a hybrid version of the Altima sedan in the U.S., Palmer said.
The introduction of more hybrid cars doesn’t mean Nissan is abandoning the ambition for electric vehicles.
“We are absolutely religious about leading in zero emissions,” he said. “Renault and Nissan invested 5 billion dollars in electric vehicles, and this is not something that we are going away from.”
On exchange rates, Palmer reiterated that he sees 100 yen versus the dollar as “neutral territory.” Nissan gains about 20 billion yen ($215 million) in operating profit with every one-yen drop against the dollar, according to the company.
“I would still say there’s small headwind which we would like to see the new government to overcome,” he said. “We’d like to see the yen at about 100.”
The Japanese currency dropped 2.3 percent versus the dollar to 95.23 yen as of 3:43 p.m. in Tokyo today. The yen has weakened about 18 percent over the past six months.
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