Nissan Motor lost nearly $2 billion in one day due to declining sales in China. The company, which announced lower quarterly profits than investors expected, also lowered its annual sales forecast. As a result, Nissan’s share price fell by more than 12 percent.
Nissan share price decreased by 12 percent in one day
Nissan announced an operating profit of $948 million in the third quarter, 20 percent below analyst estimates. It also performed poorly in China, once its largest market. This led it to lower its global vehicle sales forecast for 2024. The company’s goal this year will be to sell 3.5 million vehicles.
Chinese users are turning to companies like BYD designed specifically for the local market. These vehicles, which stand out with their advanced technologies, are also preferred due to their low cost. As a result, Nissan’s sales in China have fallen 25 percent so far.
The decline in China led Nissan to reduce prices. In this context, analysts think that Nissan is “the most vulnerable among Japanese automakers” due to its weak brand strength. Analysts also stated that competition has intensified in other important markets such as the USA.
Nissan said it would increase incentives and focus on less electrified regions in China to increase its competitiveness. It also aims to export 100 to 200 thousand vehicles per year starting from 2025 by using the excess capacity in China.
However, analysts stated that the return of exporting from China is low. With the growth of many Chinese electric vehicle startups, Nissan is trying to regain lost ground in the world’s largest auto market.
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