Nissan’s Ghosn Promises a More Profitable 2014
“You can bet on the fact that 2014 is going to see an improvement compared to 2013,” said Carlos Ghosn, CEO of Nissan Motor Co. (NSANY.PK) and Renault, in an interview on Thursday in Thimphu, the capital of Bhutan. He was in the small country to announce that Nissan would be supplying its Leaf electric cars to power the government’s fleet.
Ghosn pledged that 2014 would see better profitability results than last year, as Nissan was the odd duck left on the side of the profit surge that other Japanese manufactures experienced due to the sliding yen. Two years ago, Nissan led the pack; Honda (NYSE:HMC) and Toyota (NYSE:TM) both experienced record levels of profitability this time around.
The Detroit News reports that Nissan will probably produce lower margins than its domestic peers in the year ending in March, given that Nissan issued higher incentives in the U.S. than any Asian automaker, thus denting North American profitability.
Ghosn, however, says that incentives will decline and profits will return as margins recover.
“I can see profitability in the U.S. improving due to stabilization of our plants in North America because we have had a lot of expansion,” he said. “When you reach the stabilization level, the level of profit moves up.”
Ghosn also said that Nissan will announce further management changes in the middle of next month, as the company continues its efforts to raise its global market share to 8 percent and push its operating margins to 8 percent by March 2017, per the Detroit News.
A Reuters report from a few weeks ago indicated that Nissan may be willing to forfeit its market share goals to bring more near-term profitability. ”If we can meet our 8 percent profitability target, then it is fine if the share is a little lower and the company is moving to emphasize profitability,” Corporate Vice President Joji Tagawa told reporters after Nissan released earnings.