LDN - Business

Nissan to launch slew of new vehicles in China over next five years, CEO says

[September 26, 2020] By Norihiko Shirouzu

BEIJING (Reuters) - Nissan Motor's chief executive <7201.T> said on Saturday he planned to launch a number of new vehicles in the growing Chinese market over the next five years, including electrical cars, that could help the struggling Japanese automaker return to profit.

"The recovery in the Chinese market has been very remarkable, and our key segments have returned to the previous year's level if not slightly better," CEO Makoto Uchida said at a press conference at the Beijing auto show via a video link from Japan. "I expect this rebound to continue, but we need to watch for signs of trouble," he added.

Uchida and the company's China boss, Shohei Yamazaki, said Nissan will launch nine new and re-designed electric models in the world's biggest auto market by 2025, including plug-in electric vehicles and hybrid electric cars that charge with a gasoline engine.

Uchida's remarks come as investors express concern about Japan's second-largest carmaker, which has warned of a record $4.5 billion loss this year as the pandemic hampers its turnaround.

Growth in China is a key part of Nissan's effort to recover from rapid expansion that left it with dismal margins and an ageing portfolio that the automaker says is a result of a mismanagement by former boss Carlos Ghosn, who was arrested for financial misdeeds which he denies.

Nissan has pledged to cut 300 billion yen ($2.84 billion)from annual fixed costs and focus on each of the company’s three biggest markets: China, the United States and Japan.

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Nissan Chief Executive Officer Makoto Uchida speaks at Nissan booth via video link during the presentation of Nissan's Ariya model during the Beijing International Automotive Exhibition, or Auto China show, in Beijing, China September 26, 2020. REUTERS/Thomas Peter

Yet, while China’s automotive market continues to recover strongly, Nissan last month saw its business shrink 2.4% after showing modest growth every month since April.

That sales contraction was in stark contrast to Japanese rivals Toyota and Honda, which have both seen rapid sales growth since the pandemic’s effects began easing in China over the summer.

In August, Toyota vehicles sales in China rose 27.2% from last year, while Honda's grew 19.7%.

To bolster its finances, Nissan this month said it plans to issue $8 billion in dollar-denominated bonds and is considering euro-denominated debt. The bond sale is its first dollar-denominated issuance since its tie-up with France's Renault SA <RENA.PA> in 1999, a Nissan representative said.

A Nissan spokeswoman said some of that money would be used to repay other debt.

"Although Nissan continues to have sufficient levels of liquidity, we are seeking to strengthen our liquidity position in order to ensure smooth implementation of our business transformation plan," she said.

(Reporting by Norihiko Shirouzu, writing by Tim Kelly; editing by Sam Holmes and Raju Gopalakrishnan)

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