May 10, 2013
CEO: Good Results, Nissan Power 88 on Track
May 10 – Yokohama – Nissan reported full-year results from FY2012 on Friday, and CEO Carlos Ghosn visited the Global Media Center to give his reaction to the numbers.
Q1: What is your impression of these numbers? Given the headwinds that the company faced, are they satisfactory?
CEO: Well, we can say these are good results. They are not exceptional. They are still below our potential. We were planning for stronger results for the year, but we have to admit that we had many headwinds. We also learned a lot of good lessons during this year, particularly in the United States about how to get a better supply chain system.
Overall, good results. Our balance sheet has never been stronger. We have never had as much cash. We hit our net income after tax. So I would say 2012 will not be an exceptional year for Nissan, but overall it’s good.
Q2: The yen has been going lower against many currencies; it hit 100 yen to the dollar today. What’s going to be the impact of that going forward?
CEO: Well, I don’t think the yen is going to change anything into the quality of our product, or into the competitiveness of our product, or our productivity. Nothing. It’s going to remove some of the obstacles we had in our financial performance and in the price of our cars, which is welcome, by the way.
I consider 100 yen to the dollar as a neutral territory. I don’t think we’re getting any help now, but at the same time there are no headwinds. A positive move would be moving from 100 to 110, which some people are expecting, which, by the way, would be the average level of the yen for the last 15 to 20 years.
But from a financial point of view, it will add more to our bottom line, expressed in yen, which is positive. But part of it is going to disappear because we are benefiting from this, Toyota is benefiting from this, Honda is benefiting from it, and we are all competing in the same market. Overall, good news, but frankly it is not fundamental.
Q3: Changes have to been made to the Nissan LEAF, both to the car itself and pricing. And it’s being built in the States and in Europe as well now. What has been the impact of those changes on sales, and what do you think the impact will be on the outlook for electric vehicles?
CEO: Look, we’re following the course. We are following the plan. We said we’re going to continue to simplify the car, we’re going to localize the car, we’re going to reduce the cost, and we’re going to give as much benefit as possible to the consumer, so we can increase the sales of the LEAF. We hit 62,000 LEAF (sales) already. We are by far the carmaker with the most sales of the electric car in the history of this industry, and we believe that this is going to be an important segment of the car industry.
So, we are going to continue to lobby for more infrastructure. This is the No. 1 reason for which the sales are not growing faster. We’re going to continue to simplify the product, to localize the product, to reduce the cost, and pass it to the consumer.
The LEAF is here to stay. The main objective now that we have a car that drives very well, that people who have been using it for two years are very happy with, very satisfied with, is selling it.
Q4: All Japanese companies and manufacturers have had a challenging year in China. Has Nissan recovered from the island dispute?
CEO: I would say it is a partial recovery because if we take a look at the sales volume compared to pre-event, yes we’re back. But we are not supposed to be only back. We need to gain back our market share and here we are not yet at the market share before the event.
For the recovery to continue during the year 2013, I would say we would be fully recovered by the end of 2013, for the market share will be back to a higher level than before the event, and we will resume our progression. I’m talking not just progression in volume of sales but progression in market share.
So, I would say partial recovery now, full recovery by the end of the year 2013.
Q5: And what about Europe? What’s your assessment there?
CEO: In Europe our team has done a very good job because we maintained market share in a very difficult market, even though we have not launched one single new product for the last two years.
I think the picture in 2013 should be different when we’re going to be increasing market share because we have important new products coming to the market. So, I am very confident that even though the European market is going to be tough in 2013, and probably mediocre for another couple of years before we see any growth coming, we should be doing well by increasing our market presence and at the same time preserving our profitability.
Q6: Nissan has an ambitious plan, Power 88, to have 8% market share and 8% profitability by 2016. Given these numbers you’ve announced today is Nissan on track?
CEO: Yes, definitely we are on track. Some years we are going to be more consolidating. Other years we are going to be advancing. But today, with the results we are showing, a little bit more than 6% global market share and a little bit less than 6% operating profit, we are stuck at Power 66. So, you know, we have to advance to probably Power 77 and then Power 88. But we have time for this. We still have three years in front of us. We have a strong plan. We have a good team. We have a good strategy. Yes, we are on track for Power 88 on time.