Profits crash at Nissan UK: Slump in exports causes 93% decline. Mary Fagan reports

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The Independent Online
OPERATING profits at Nissan UK slumped to pounds 2.1m in 1993 from pounds 29.3m the previous year as the turmoil in the European car market took its toll.

The company, which employs more than 4,000 people at its Sunderland plant, produced only 246,000 vehicles in 1993 instead of the planned 270,000.

Last year Nissan overtook Rover as Britain's top car exporter and had hoped to produce between 200,000 and 240,000 cars at Sunderland in 1994. However, it warned that the uncertain outlook in Europe makes it hard to predict this year's performance. Nissan had offered workers a voluntary severance package of around six months' pay, but it will not say how many have taken it up.

The effects of the tough export market were exacerbated by a change in the mix of cars produced in Sunderland. Nissan introduced a second model - the Micra - in 1993 and now says the tighter margins on the smaller vehicle affected its financial results.

The slump in car markets both in Europe and Japan also hit overall group results. Nissan worldwide made a net loss of 86.92bn yen ( pounds 550m) in the year to 31 March 1994 compared with a loss of Y56bn a year earlier. The group said the loss was partly attributable to the appreciation of the yen against almost all main currencies.

Nissan said exports from Japan will fall to 570,000 this year from 629,990 last year and that domestic sales will decline as well. It also emerged yesterday that total exports from all Japanese manufacturers except Toyota and Isuzu will fall to 2.70 million vehicles in the year to 31 March 1995, from 2.90 million last year. Toyota and Isuzu have given no forecasts.

Total car exports from Japan fell for the 13th month in a row in April and were 17.3 per cent below the same period in 1993. Decreases ranged from 11.3 per cent at Toyota to 30.2 per cent for Mitsubishi.

Only Honda bucked the trend by increasing its exports, demonstrating its strength in North America and its weakness in Europe. Honda's exports rose by 38.7 per cent. Last week it predicted that it would double net profit this year because sales in the US are so buoyant.