Nissan’s Prolific Operating Profits Fall Prey to Currency Fluctuations
Nissan is regarded as one of the leading carmakers around the globe. It produces cars that boast stupendous aesthetics and astounding performance. However, year 2017 did not bring much good news for the automaker. As reported by Nissan itself, the Japanese car manufacturer saw a 15% drop in its third fiscal quarter which ended back in December.
The company saw the decline in its operating profit which is said to have been driven by the appreciation of the national currency in the foreign exchange market. This steep slope was accompanied by the rising incentives. The result adversely affected earnings of the company.
The Japanese Yen performed well in the last quarter of the calendar year. Apparently, the rise of the currency did not pose much benefit for the company which has otherwise been doing well globally. The Japanese automaker revealed that its global sales had been on a hike in the said quarter. With 1.38 million units sold in retail, Nissan saw an 8.3 percent growth in the retail sector.
The Figures
It boggles our minds as we read the figures stated by the company, and how the outcome still managed to take a negative course. Nissan’s net income rose to $1.13 billion—a 3.5% increase—between October and December 2016. Despite the appreciation, the operating profit went down to $1.40 billion during the same period. These figures were announced by Joji Tagawa—Corporate VP Nissan.
Joji Tagawa also revealed that the Yen’s performance in the foreign exchange market dented the admirable performance of the company. The dent, in terms of numbers, cost Nissan around $699.1 million. This blow was borne by the company’s operating profit.
As per Carlos Ghosn’s—CEO Nissan—plans, Nissan pursues a goal of reaching an operating profit margin of 8% in the global market by the end of its fiscal year in March 2017. The unfortunate circumstances faced by the company in the third fiscal quarter took down its operating profit margin to 6.7%. In other words, there is a fair chance Nissan won’t be able to reach its target.
The ambitious Japanese auto manufacturer also routed for an 8% market share by the end of March 2017. The CEO knew in an interview back in October 2016 that the event was quite unlikely to happen, provided the Yen’s prolific position in the foreign exchange was sustained.
The North-American Region
All of this greatly impacted Nissan’s profits in North America as the Yen gained power against the Canadian Dollar and Mexican Peso. To make matters worse, the appreciation of the dollar against several other currencies also went on to hurt the automaker. Only in North America, the currency fluctuations resulted in a $599.7 cut, off the operating profits.
As a result, despite the increased sales, the operating profit of Nissan in the North American region fell by an astounding $230.5 million (72%).
Are you looking for a top-quality used engine for your Nissan? Simply dial (800) 903-4430 and contact EngineWorld. We import the best transmissions and replacement engines from Japan, and already have around 80,000 items in stock.
Sources
http://www.just-auto.com/news/nissan-q3-operating-profit-hit-by-high-yen_id174804.aspx
Related posts
Common Mistakes Drivers Make When Buying A New Engine
Your car’s engine is one of the most important parts of your vehicle. Unfortunately, many drivers have common misconceptions about what to look for in a new or used engine. This often leads to mistakes that can be costly later on. But how can you be sure you’re not making a mistake when you’re investing […]
Top 3 Ranked Japanese Engines
In 2016, the top three goods that were imported were: vehicles, machinery, electrical machinery. The reasons why America bought $50 billion worth of automobiles from Japan in 2016 is because of the vehicles’ reliability and high-quality engines. If you are looking to buy the best Japanese engines, low mileage Japanese engines, used Japanese transmissions, or […]
Advances in Engine Technology
Cars aren’t going anywhere in the foreseeable future. Toyota alone is estimated to produce over 11 million cars in 2023. Having a high quality engine is one of the most important parts to overall car health and performance. Whether you are looking for a used Japanese engine, or new imported engines from Japan, it is […]