- Nissan Motor Corp.’s third-quarter net profits plunged 42.5% year over year, according to the company’s earnings presentation on Wednesday.
- The automaker also lowered its fiscal year 2023 sales forecast from 3.7 million units to 3.55 million due to “intensifying competition” and logistics problems in major markets, CFO Stephen Ma said during a media call discussing the results.
- However, Nissan did not revise its full-year financial guidance. The automaker still expects its net profit to rise 75.8% year over year to 390 billion yen ($2.69 million) in FY 2023.
A series of rising costs hurt Nissan's margins in Q3, though company executives assure some of the issues have been resolved ahead of the next quarter.
Foreign exchange rates, particularly in emerging markets and Argentina, and restructuring costs in India hurt the automaker’s financial performance, Ma said. The company also lost money because of retroactive supplier payments, inflation, and regulatory costs.
However, one of the most significant drags on margins came from logistics, as Nissan lost sales in North America due to delays at the U.S.-Mexico border.
"The main issue was the lack of logistics capacity from Mexico to the US market," Ma said in a call with investors. "We were originally planning to have even more but it was not enough."
But Nissan doesn’t expect logistics to be an issue in Q4 because it secured additional trucking, rail and maritime transport capacity from Mexico to the U.S. and Canada via the Atlantic.
“We are expecting to see quite a bit of improvement in Q4 in the U.S. market,” Ma said during the media call.