Nissan turns to profit outlook

Nissan Motor, Japan's third-biggest car maker, today revised its annual outlook to a profit from a loss as soaring sales in China helped drive quarterly earnings beyond the market's expectations.

Nissan had been expected to lift its forecasts after it cranked up its sales target in the fast-growing Chinese market by nearly a fifth in September as Beijing's tax incentives for smaller cars boosted demand for models such as the Tiida and the Sylphy.

Most other Japanese rivals have also lifted their annual forecasts as stimulus measures by governments around the world have provided at least a temporary boost to demand.

Nissan said it now expects to sell 3.3 million vehicles globally in the year to March, raising its forecast by 7 per cent.

Nissan, owned 44 per cent by Renault, now expects an operating profit of 120 billion yen in the year to March, instead of the 100 billion yen loss it had forecast previously.

Earnings made in China are counted in Nissan's operating profits, unlike those at Toyota and Honda, which report under U.S. accounting rules.

Nissan executives have said efforts to shave costs and return to positive free cash flow were slightly ahead of plans, while higher-than-anticipated sales in China were helping to offset some of the sharp falls in the United States and the Middle East.

Nissan has also been shifting production of some of its cars from Japan to escape a rising yen.

Reuters