Shares in Japanese carmaker Nissan Motor Co. Ltd. declined on Friday after the company cut its global sales outlook for the fiscal year ending March amid challenges in the Chinese auto market.
Nissan’s stock was trading 11.11% lower in Tokyo, positioning the shares for their largest single-day fall since September 2001 and removing about $1.8 billion in market value.
The Kanagawa-based company left its fiscal-year estimates for revenue and net profit unchanged at ¥13 trillion ($87 billion) and ¥390 billion ($2.6 billion) on Thursday, respectively, due to a weaker yen.
It also expects better profitability in its product mix to curb its lower global sales forecast of 3.55 million units for this fiscal year. That compared to previous sales expectations of 3.70 million vehicles.
Responding to Challenges in China’s Car Market
Nissan Chief Financial Officer (CFO) Stephen Ma said the revision reflects the challenges the automaker is facing, which include fiercer competition and logistic problems in their key markets.
The situation in the world’s top car market, China, was especially tough, according to Ma, prompting them to adjust their full-year outlook.
Competition between automakers in the country remains strong amid a price war triggered by Texas-based Tesla Inc. in 2023. Domestic brands, such as electric vehicle (EV) manufacturer BYD Auto Co. Ltd., are currently in the lead due to their robust EV offerings.
Seeing its Chinese sales volumes slide 26% in the nine-month period, Ma stated that Nissan has carried out measures to ease the industry-wide challenges it is experiencing and further its competitiveness in the country.
The company has remade strategies to turn its attention to cities and regions of China’s auto market where the pace of electrification may need more acceleration.
The move has allowed Nissan to improve its sales by 19% year-on-year to 247,000 units in the third quarter ending December 31, Ma added.
Furthermore, the Japanese carmaker is addressing intensifying competition and consumers’ switch from traditional gas-powered cars by planning a launch of new models in the country, including EVs and a plug-in hybrid car, in the coming years.
It also intends to start exporting vehicles from China in 2025.