Nissan reports loss for fiscal 1st quarter

[July 29, 2009]  TOKYO (AP) -- Nissan reported a smaller-than-expected 16.5 billion yen ($175.5 million) loss for the fiscal first quarter Wednesday and unveiled plans to build more cars in China, one of the few auto markets where sales are still growing.

Nissan Motor Co., Japan's third-biggest automaker, blamed slumping sales in most markets and the strong yen for the April-June quarter loss. A Thomson-Reuters survey of analysts had forecast a loss of 108.5 billion yen. Sales dropped 35.5 percent from a year earlier to 1.5148 trillion yen ($161.15 billion).

Tokyo-based Nissan, 44 percent owned by Renault SA of France, kept its forecast for the year through March 2010, unchanged at a 170 billion yen ($1.8 billion) loss.

Nissan's global sales totaled 723,000 vehicles, down 22.8 percent from the same period the previous year.

Vehicle sales dropped in the U.S., Europe and Japan but were strong in China, surging 9.3 percent during the quarter to 145,000 vehicles.

Also Wednesday, Nissan's Chinese partner, Dongfeng Motor Co. Ltd. announced the expansion of the Huadu passenger vehicle plant in Guangzhou City, southern China, which will get an additional assembly line, set to start running in 2012.

The investment will total $730 million, and annual capacity will eventually reach 600,000 vehicles, according to Nissan.

Dongfeng Nissan's current annual production capacity in China at plants in Huadu and Xiangfan is 460,000 units. Once the expansion is completed, that will be raised to 700,000.

Nissan acknowledged tough times remained ahead. But it pointed to some signs of a gradual recovery, thanks to government stimulus and cash-for-clunkers measures around the world that were helping boost sales.

Nissan isn't raking in the full benefits of such perks because it doesn't have a popular gas-electric hybrid among its product offerings, such as Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight, whose sales are booming, especially in Japan.

Honda on Wednesday bucked expectations for losses and remained in the black for the fiscal first quarter, although the profit posted was relatively humble at 7.5 billion yen ($79.8 million).

Toyota reports earnings Aug. 4.

Automakers are cautious about their prospects for the coming year, partly because it is unclear how long the boost from cash-for-clunkers and other scrap schemes will last.

Nissan Chief Executive Carlos Ghosn said "2009 continues to be a tough year, but we are beginning to see positive results."

He said the move of corporate headquarters to Yokohama next month as well as the automaker's electric vehicle, set to go on sale next year, underscored an upbeat, green Nissan.

Like other automakers, Nissan is eyeing emerging markets such as China, Brazil and Russia to keep growth going as more mature global markets stagnate.

Nissan shares gained 0.8 percent to 631 yen ($6.7) in Tokyo. Earnings were announced after trading ended.

[Associated Press; By YURI KAGEYAMA]

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