Nissan Returns to Profit on China Sales Growth

Struggling Japanese automaker Nissan Motor Co. said Wednesday it climbed back into the black in the latest quarter and predicted a smaller yearly loss thanks to soaring demand in China.

The country’s No. 3 car company posted net income of 25.5 billion yen ($270 million) in the July-September period after three straight quarters in the red. The result was 65 percent lower compared to last year but far better than Nissan’s 16.5 billion yen loss in the April-June quarter.

Sales totaled 1.87 trillion yen ($19.57 billion), and operating profit came to 83.3 billion yen ($870 million). The automaker sold 901,000 vehicles in the quarter, down 6.8 percent from the previous year.

“Our performance in the first half of fiscal 2009 is encouraging, demonstrating that Nissan’s recovery plan is on track,” President and CEO Carlos Ghosn said in a statement. “Our outlook will remain cautious until we see evidence that economic recovery can be sustained in world markets.”

Robust business in China, as well as government subsidies that have lured more buyers around the world, contributed to the better-than-expected results.

Sales in China, where government stimulus measures have underpinned demand this year, surged 48 percent to 396,826 units in the April-September period compared to the year ago period. That helped offset steep declines in Japan, the U.S. and Europe.

Executive Vice President Hiroto Saikawa credited the Yokohama-based company’s performance in China to timely product launches and strong distribution channels among smaller inland cities.

“We believe that we will be able to raise our presence in this main market,” Saikawa told analysts at an earnings briefing.

Recovering demand led Nissan, 44 percent owned by Renault SA of France, to lift its estimates for the full fiscal year through March 2010.

It now expects a narrower net loss of 40 billion yen compared with its previous estimate of a 170 billion yen loss, with revenues pegged at 7 trillion yen. Nissan also raised its global sales forecast from 3.08 million vehicles to 3.3 million vehicles.

A new report Tuesday showed that the U.S. auto market may be brightening as well. Total U.S. sales of cars and light trucks rose 12 percent from a dismal September 2009, though were little changed compared to a year ago, according to Autodata Corp.

Nissan was one of the biggest winners of the month, posting a 5.6 percent gain in auto sales. Demand for Nissan models offset falling sales of its Infiniti model, the carmaker said.

For the April-September half, Nissan booked net profit of 9 billion yen and revenue of 3.38 trillion yen.

It sold 1.69 million vehicles during the six-month period, down 10.5 percent from the previous year.

Shares of Nissan rose 1.7 percent to 661 yen on the Tokyo Stock Exchange. Earnings were released after market close.

11/4/2009 4:35 AM TOMOKO A. HOSAKA, Associated Press Writer TOKYO