Nissan Motor Co., Japan's third- largest automaker, said profit in the second-half will go to ``zero'' because of lower sales in the U.S. and a stronger yen.
Chief Executive Officer Carlos Ghosnmade the comments in an interview with the Wall Street Journal, which were confirmed by Nissan spokesmanSimon Sproule. Last month, the company forecast second-half net income of 33.7 billion yen ($348 million) and operating profit of 78.4 billion yen.
The yen has gained 16 percent against the dollar and 34 percent against the euro this year, eroding Tokyo-based Nissan's overseas earnings. Lower demand for Sentra small cars and Pathfinder sport-utility vehicles drove the carmaker's U.S. sales down 34 percent in October as the industry heads to the lowest annual tally in 15 years.
``There's a possibility of a loss in the second half, depending on what happens with the currency and sales,'' said Koji Endo, a Tokyo-based analyst at Credit Suisse Securities (Japan) Ltd., who rates the company ``underperform.''
Nissan rose 2 percent to 363 yen as of 9:30 a.m. compared with a 0.5 percent gain in the benchmark Nikkei 225 Stock Average. The shares have fallen 71 percent so far this year.
Credit Crunch
The credit crunch has crippled U.S. vehicle sales, forcing General Motors Corp., Ford Motor Co. and Chrysler LLC to seek a combined $25 billion in U.S. government loans as they burn through cash.
U.S. sales are at ``depression level,'' according to David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan, forcing carmakers to offer incentives to lure buyers back into showrooms.
Toyota Motor Corp., Japan's biggest carmaker, is offering no-interest loans on more than half of its models, including the 2008 4Runner, 2009 Camry and 2009 Corolla. Chrysler LLC promises up to $6,000 cash back on a 2008 300C. General Motors Corp. began its annual ``Red Tag'' sale almost 10 days early this year.
Nissan based its profit forecast in October on an exchange rate of 103.1 yen to the dollar. The yen has gained 15 percent against the dollar in the past year and traded at 96.78 against the U.S. currency today.
The company abandoned its plan last month for fixed dividends over the next three years. Nissan said it would review its planned payouts to shareholders.
