Nissan losses double analysts' forecasts: Pounds 1bn turnover at UK plant fails to lift gloom

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The Independent Online
NISSAN, Japan's second-biggest car maker, plunged to a Y108bn (pounds 647m) loss last year after a Y86bn profit in 1991/2 and has warned that the outlook this year remains poor with investment, production exports and recruitment all set to decline.

The larger-than-expected loss announced yesterday was almost double the worst estimates of analysts and was blamed on the sharp downturn in Nissan's home market, weaker overseas demand and the strength of the yen.

Britain was one of the few bright spots, with operating profits from Nissan's Sunderland manufacturing plant rising from pounds 17m to pounds 29.2m in the 1992 calendar year and turnover breaking through the pounds 1bn level for the first time.

The Japanese car maker's new UK sales and distribution arm, Nissan Motor GB, fared less well, recording a loss of pounds 17m, largely due to the heavy costs of starting up a 270-strong chain of dealerships from scratch.

Overall, Nissan managed a profit in Europe in 1992 but it was down very substantially on the pounds 130m made in 1991.

The downturn in the Japanese economy reflected in Nissan's group loss is not expected to improve materially in the next 12 months. In the year to the end of March 1994, Nissan's managing director, Koichi Takagi, forecast that investment would decline from Y200bn to Y170bn and domestic sales from 1.23 million to 1.2 million.

Nissan, meanwhile, plans to cut recruitment in half by taking on only 2,000 extra staff between 1994 and 1996 - the same number as it will recruit in 1993/4.

Exports are also expected to drop from 900,000 to 760,000 in 1993/4, due in part to increased overseas production at plants such as Sunderland and Nissan's US transplant factories. Overseas output is set to rise to 1.15 million from 926,618 last year.

Output from Sunderland rose from 124,700 in 1991 to 179,000 last year and production of the Primera and Micra models is set to reach 270,000 this year. However, the plant will shed about 230 workers through natural wastage and a recruitment freeze.

The pounds 29.2m contribution from Sunderland helped Nissan Motor Manufacturing UK reduce its accumulated losses since production began seven years ago to pounds 88m. Nissan expects to break even on its UK investment some time after 1995.