China sales help Nissan close in on chief Carlos Ghosn's key targets
Strong demand in US also contributes to 37pc rise in net income for quarter to June, boosting optimism that chief's strategic goals will be met
Nissan, Japan's second-biggest carmaker, reported profit that beat analysts' estimate as deliveries rose in China and the United States, its two biggest markets.
Net income rose 37 per cent to 112.1 billion yen (HK$8.5 billion) in the April-June quarter, beating the 84.3 billion yen average estimate in an analyst survey.
The profit increase may signal chief executive Carlos Ghosn is gaining traction after making dozens of executive changes in November to improve execution and cut incentives in the US. Deliveries have outpaced Honda and Toyota in the US and China this year, as Nissan chases its targets of 8 per cent operating margin and global market share.
"In terms of their full-year plan, they are pretty much on track," said Kota Yuzawa, a car analyst at Goldman Sachs in Tokyo. "Their China sales are quite strong this year."
Operating profit in the quarter rose 13 per cent to 122.6 billion yen, beating analysts' estimate of 114.2 billion. Sales rose 10 per cent to 2.47 trillion yen, compared with the analysts' estimate of 2.41 trillion yen.
In terms of their full-year plan, they are pretty much on track
Nissan forecasts global deliveries will climb 8.9 per cent to 5.65 million vehicles this fiscal year, representing a global market share of 6.7 per cent, it said in May. Revenue will rise 3 per cent to 10.79 trillion yen, while operating profit will gain 7 per cent to 535 billion yen, the firm said.
The carmaker's stock had risen 13 per cent this year, compared with a 4.7 per cent decline for the benchmark Nikkei 225 Stock Average.
"Encouraging demand for new products, benefits from recent plant investments, and improving market conditions in North America, China and Europe combined to lift both revenues and profits," Ghosn said. "Nissan is well placed to deliver on its outlook given our continued product offensive along with measures to enhance competitiveness [and] build market share."
In the US, Nissan overcame production delays for its key models including the Altima mid-size car in 2012, boosting January-June sales by 13 per cent, compared with the 5 per cent growth at Toyota and 1 per cent decline at Honda.
"Manufacturing and sales operations - which had been falling like dominoes into chaos since March 2012 - have finally stabilised," Jefferies analyst Takaki Nakanishi wrote in a report. "Nissan must recuperate the core of the North American competitiveness and profitability."
In China, where Nissan is the biggest Japanese carmaker, sales rose 21 per cent in the quarter to 283,000 units, boosted by the X-trail SUV. Nissan is targeting to gain a 10 per cent share of the market in China, which accounts for a quarter of its sales by volume. The company has said it expects to sell more than 1.4 million units this year in the world's largest car market.
Nissan still has to grapple with start-up costs with new plants in emerging markets. The carmaker opened its second plant in Thailand this month and will start production at its fourth plant in China later this year.
Nissan started sales of the no-frills Datsun brand in India and Indonesia and plans to start deliveries in Russia and South Africa this year to target the lowest end of the market.
