Japan: Nissan wants profit over market share image

According to Corporate Vice President Joji Tagawa, the automaker would even accept falling short of its global market share target of 8% by 2017 if that means it would be able to increase profitability instead.

After it revealed fourth quarter profits that grew but fell short of analyst expectations and was revealed that it didn’t manage to boost profit by taking advantage of the very favorable currency exchange rate, Nissan’s official said that for the period to 2017 achieving an 8 % operating profit margin target is now more important than reaching the market share goal.

Basing the figure on the accounting standards in place when it made the 8 % targets, Nissan’s operating profit margin for the nine months to December was 4.7 % – but the company currently adjusted those standards, which resulted in an even lower margin of 4.1 %. Tagawa also said that both targets would be monitored according to the previous standards and that currently the company’s global market share is in the 6 % range.

Carlos Ghosn, CEO of both Renault and Nissan has lately set very ambitious targets aimed at boosting the automaker’s operating profit margin and market share, made management changes and position shuffles and also mandated an improvement in Renault-Nissan interoperability in the production and R&D sectors.

Still, Nissan’s targets could be endangered by the product recalls of late and the slowdown in important markets like Russia or Thailand.

Via Reuters