Friday, June 24, 2022
News Nissan Posts $1.6B Loss, Expects Break-Even This Year

Nissan Posts $1.6B Loss, Expects Break-Even This Year

Automaker struggling with chip shortage, Covid

  • Record loss for 2020 aggravated by ongoing microchip shortages

  • Company expects return to break-even this year


Nissan has reported record losses for 2020, impacted by COVID-19 as well as the ongoing chip shortage. Despite that, the automaker expects to break even this year, though that’s less than the large profit previously expected from the company.

“The fiscal year 2020 was a year dominated by the COVID-19 pandemic and impacted by multiple factors including growth of environmental awareness and political as well as economic changes,” Chief Executive Makoto Uchida said, Reuters reports.

“If we look at the immediate challenges today, there is a big impact from business risks like semiconductor and commodity price hikes… so at this point in time, we are foreseeing operating profit coming out even,” the executive said on an earnings call.

Nissan cut 130,000 units of production as a result of the ongoing semiconductor shortage that was worsened by a fire in Japan as well as the winter storms that knocked out power in Texas. The company has recovered some of that, but not all, and it will likely affect half a million units of production for the automaker this year.

Reuters said that Nissan planned to slash production in Japan this month as well as making adjustments to plants in the US and Mexico.

For the fiscal year 2020, Nissan reported an operating loss of 150.65 billion yen (CAD 1.6B), though this beat forecasts thanks to cost-cutting and improved sales. The report says Nissan expects to sell 4.4 million vehicles this year, up from 4.1 in the prior year, still a marked decrease from 4.9 million it sold in 2019.

 

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