Nissan reported quarterly operating profit down 19.7% due to strong yen and expensive sales incentives.
The company hoped to reach its full-year operating profit target of 700 billion yen, hoping that revamps of its existing models, such as the Altima sedan, will boost sales. Nissan, which is owned 43% by Renault, is sure that it will be able to increase sales in China but expects struggling sales in Europe in the fiscal year to March 2013.
“We will be introducing new models in the second half of the financial year. Our internal plan is that while performance in the first half is rather slow, we will see growth in vehicle sales and profits in the latter half of the year,” said Joji Tagawa, Nissan’s corporate vice president.
In June operating profit decreased to 120.7 billion yen ($1.5 billion), under the forecast of 142.5 billion yen made by six analysts. Year-to-year net profit dropped to 72.3 billion compared to 85 billion in 2011. Nissan blames its low profit on the yen’s strength, and on increased sales costs, such as incentives to sell older models in the States.