Struggling Nissan posts fifth loss in six years Failure to meet desires of buyers is blamed; Auto industry


TOKYO -- Nissan Motor Co., Japan's second largest automaker behind Toyota Motor Corp., posted its fifth loss in six years yesterday as it failed to keep pace with changing demand, sending its U.S. operations into the red and its sales crashing in Japan.

Nissan, which makes the luxury Infiniti sedan, posted a group net loss of 14.0 billion yen ($10.17 million), for the year ended March 31 compared with a profit of 77.7 billion yen the year before. Sales fell 1.4 percent.

The company cut its earnings forecast just last week and yesterday's results were expected by analysts.

Nissan's North American units, including Nissan North America Inc. and Nissan Motor Manufacturing Corp. U.S.A., lost 80 billion yen ($580 million) -- twice what the company expected. That's because they cut prices of cars such as the Altima, a mid-sized sedan that's too small to compete with Toyota's Camry and Honda Motor Co.'s Accord, the best-selling cars in the United States last year.

"The losses in the U.S. may expand this year," said Yasutaka Izumura, an auto analyst at Deutsche Morgan Grenfell. "With falling prices, and high inventories, they have to keep offering discounts to sell cars."

Nissan's U.S. inventory has been piling up to the point where it will take six months to bring its stock down to normal levels, analysts said. The company has enough cars to last 117 days, compared with 46 for Toyota and 39 for Honda, analysts estimate. Seventy days is about normal, Izumura said.

In Japan, sales fell as Nissan stuck to sedans when car buyers wanted sport-utility vehicles.

"To put it bluntly, we have a lot of cars that don't sell," Nissan President Yoshikazu Hanawa said at a news conference last week.

The company said it expects to break even this fiscal year on a sales decline of 1 percent.

Pub Date: 5/28/98

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