Dispute over Senkaku Islands makes 20% dent in Japanese car maker's prediction, putting it in same boat as Honda and Toyota
Nissan has cut its annual profit forecast by 20% owing to tumbling Chinese sales after a territorial dispute between Japan and the world's second largest economy.
The Yokohama-based car maker joined Honda and Toyota in suffering plummeting demand due to a consumer boycott over the Senkaku Islands. Nissan cut its full-year net profit forecast by a fifth to $4bn (£2.5bn), reflecting its dependence on a market that accounts for more than a quarter of sales. The scale of the boycott was revealed by October sales figures, which showed that Nissan and its Chinese joint venture sold 64,300 vehicles – a decline of 41% on the same month last year. Toyota and Honda reported Chinese sales slumps of 49% and 41% respectively in September.
As well as cutting its full-year profit forecast, Nissan trimmed annual sales forecasts as it estimated that sales in China will come in at 1.175m vehicles in 2012, 175,000 fewer than it thought previously. That helped to put a dent in global forecasts, with Nissan predicting sales of 5.08m vehicles in the year to March 2013, down from its former forecast of 5.35m. Nissan said, however, that there had been signs of a revival in China, now the world's largest car market ahead of the United States.
"We are gradually seeing signs of recovery [in China]," said Nissan's chief operating officer, Toshiyuki Shiga. "Customers are gradually coming back to dealerships."
Meanwhile, Germany's BMW said ongoing Chinese demand for luxury vehicles – also a boon for UK car makers such as Bentley – helped to overcome a weak European performance in the third quarter from July to September. Overall sales rose by 13.7% to a record €18.8bn (£15bn), while net profit rose 16% to €1.3bn. Chinese sales rose by 30%, overshadowing an anaemic European performance that saw a 2.6% increase in sales, with southern Europe dragging down performance. Even BMW's home market disappointed, as German sales fell by 0.5%.
China aside, BMW warned of an "increasingly uncertain market environment" with the final three months of the year posing difficulties for an industry "likely to be confronted with adverse business conditions". With the eurozone area expected to post flat economic growth next year, hopes of a concerted revival in the European car market are slim. In September, European car sales fell for the 12th consecutive month, with Spain posting a 36.8% fall in sales, exceeded only by Greece, with a fall of 48.5%.
UK car sales in October, published on Tuesday, showed that the domestic market was outperforming the continent. The Society of Motor Manufacturers and Traders said new car registrations rose 12% compared with October last year to more than 151,000 units. So far this year, the UK car market has grown 5%. The top three sellers in October were the Ford Fiesta, followed by the Vauxhall Corsa in second place and the Ford Focus.
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