Nissan returns to profitability in 2021

After having suffered two financial years of losses, Japanese carmaker Nissan ends 2021 with a full-year net income of 215,5 billion yen (€ 1,6 billion) in spite of the currently extremely challenging automotive environment. The group benefited from its 2019 restructuration and NEXT strategy focusing on quality sales.

“The business environment in 2021 remained extremely challenging, affected by external factors such as the prolonged coronavirus, semiconductor supply shortages, and high raw material prices. Despite these challenges, Nissan has continued to make steady progress with its Nissan NEXT transformation plan by strengthening its business foundation, improving quality of sales, and bringing new models to market”, writes Nissan in a press release.

Return to profitability

For the full 2021 fiscal year, Nissan reports consolidated net revenues of 8,42 trillion yen (€ 62,8 billion), with an operating profit of 247,3 billion yen (€ 1,8 billion). This return to profitability is marked by a growing operating margin of 2,9% and a net income of 215,5 billion yen (€ 1,6 billion). It contrasts with the two previous fiscal years, especially with 2020 when Nissan got hit by heavy losses amounting to 3,4 billion euro.

According to Nissan, this profitability is the result of the brand’s NEXT plan building on quality of sales instead of revenues. The group has benefited from the fall of the yen. The Japanese currency is at the lowest since April, which fuels export.

Uncertainty for 2022

In spite of this return to profitability, Nissan plans for a bleak future. New Covid-19 lockdowns in China, the continuous semiconductors crisis, and the war in Ukraine are all hindering the progress of the automotive market. Nissan plans for a 30% net profit loss in 2022, a year that the group describes as “even tougher”. Furthermore, trouble is on the horizon as rumor has it that Renault is considering selling part of its stake in Nissan.

“Although we expect the business environment to become even more challenging in 2022, we are confident to achieve our transformation plan and ensure Nissan remains a truly healthy and resilient company. We will reassure the plan’s target of a 5% operating margin in 2023”, said Nissan President and CEO Makoto Uchida, in the company’s recent press release.

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