Kane Davis Cooper – Japan’s Nissan has revised its full-year profit forecast down after the safety inspection disgrace struck a blow to earnings.
It now forecasts an operating profit of around $5.7 billion for the year to March 2018, down from previous estimates of $6 billion.
It also saw a steep decline in operating profit for the quarter to September because of weakness in the US.
Nissan had to recall over a million vehicles locally in Japan in October after failings in safety checks were found. The company had said that the total cost of this recall would be approximately $220m.
In Yokohama this week, chief executive Hiroto Saikawa gave a long bow of apology and pledged to “regain the trust” in the aftermath of the situation.
“I would like to express my apologies to customers, business partners, dealers and all the people who have been supporting Nissan,” he said.
Japan’s second-biggest automaker stopped domestic production for about three weeks after it discovered unqualified employees routinely undertook final vehicle inspection checks for years. On Wednesday, it restarted production at all six of its Japanese manufacturing plants.
The scandal is the most recent in a litany of transgressions involving Japanese manufacturers, following the data misrepresentation at Kobe Steel. Last year, Mitsubishi Motors confessed that it had made up fuel efficiency test results on some of its vehicles.
As well as the after effects and fallout from the safety check scandal, other factors have affected earnings for the Japanese giant.
Operating profit dropped to 128.5 billion yen for the quarter to September, down 35.4 billion from the same period in 2016. Japan’s number one car producer, Toyota, also announced that its sales were at the lowest they have been in almost three years
In the Asian market, Nissan has been doing better with an 8% jump in sales in China and over 25% in its home market.