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Nissan's Ghosn says this will be a year of two halves

Nissan Motor CEO Carlos Ghosn smiles as a shareholder takes pictures with her mobile phone after Nissan's shareholders meeting at Yokohama, Tokyo, yesterday. PHOTO: AFP

Nissan Motor Co chief executive Carlos Ghosn yesterday warned shareholders to brace for a tough spell in the months ahead but predicted a pick up in sales later in the year.

He said that Nissan, Japan's second-largest automaker which is 44.3 percent owned by France's Renault, may miss its domestic sales target for the year to March next year as it struggles to adapt to a consumer shift towards smaller cars.

"[The fiscal year] 2006 will be a year of two distinct halves. The first half will be tough and challenging," said the Brazilian-born executive, who is credited with saving Nissan from bankruptcy and steering it to record profits.

He sought to reassure nervous small investors, who gathered in this city south of Tokyo for an annual shareholder meeting, that Nissan would see an improvement in its fortunes later this year.

"Do not be too disturbed when you see that our sales and operating profit are down every month during the first half of this fiscal year [to March next year]," he said, predicting a flurry of negative media headlines.

"I can tell you what they're going to say: `The reform is down,' `The Ghosn magic is not working'... You're going to hear all these stories," he said.

"Please be confident. We are confident," he told shareholders.

"From October 2006, we have a very strong and very attractive product pipeline coming," he said, brushing aside suggestions from one shareholder that Nissan no longer had "a spirit of a winner."

Global sales volumes would grow by more than 10 percent in the second half and operating profit was expected to accelerate as Nissan launches nine all-new models worldwide this year, Ghosn said.

Nissan's biggest market is the US where, like other Japanese automakers, it is enjoying brisk sales as local giants General Motors Corp and Ford Motor Co wallow in losses.

In Japan, however, Nissan's sales fell 0.7 percent in the year to March although the group still made a sixth straight year of record profits.

Ghosn said Nissan now expects domestic sales of between 800,000 and 846,000 vehicles this year.
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