Nissan Struggles as Chinese Economy Slows

Nissan is having trouble in its global auto operations and markets. China is contributing big time to that difficulty.

Nissan Cuts Full Year Forecast on China Woes has the story:

"YOKOHAMA, Japan—Nissan Motor Co. on Tuesday slashed its full year profit forecast by 20%, citing faltering sales in China, weaker demand in Europe and the strength of the yen, the second major Japanese auto maker to warn of weaker results recently. . . .

"We're revising full-year guidance downwards given the over-valued yen, a disrupted selling environment in China resulting from the political demonstrations, and the challenging economic environment in Europe," Toshiyuki Shiga, Nissan chief operating officer, said at a news conference here.

Nissan's weaker outlook followed a similar warning last week from Honda Motor Co., which cut its full-year forecast by 20% to ¥375 billion, citing difficulties in China. Of Japan's big three auto makers, only Toyota Motor Corp. surprised on the upside, raising its outlook 2.6% to ¥780 billion on U.S. and Southeast Asian demand.

Nissan's warning reflects ongoing concern about the yen's rise against the dollar and euro, as well as lower sales in China amid a boycott targeting product made in, or by, Japan. A longstanding territorial dispute between Beijing and Tokyo over a set of East China Sea islands flared up in September souring demand for Japanese brands.

Last week, Nissan said its sales in China fell 41% in October from the same month a year earlier following a 35% drop in September. That severely crimped Nissan's outlook since it relies on China for about a quarter of its total profits, a greater share than either Honda or Toyota.

Mr. Shiga said its slumping Chinese operations would lower operating profits by some ¥60 billion in the full year, but that the auto maker remains committed to its business in China. . . .

Nissan cut projected sales volumes by 13% in China and by 2.1% in the U.S., its two largest markets. "

SUMMING UP

China and Nissan both need the U.S. politicians to avoid the year end fiscal cliff.

So do our U.S. based auto makers need such common sense behavior from our politicians.

It's tough enough in today's essentially stalled global economy without "public servants" committing more "unforced errors" and making things even more difficult, as a tennis coach might say.

Thanks. Bob.