Nissan cuts annual earnings forecast by 18%

Nissan has cut its earnings forecast, saying it is feeling the pinch of tougher market conditions and recent recalls.

The Japanese car-maker now expects to make a net profit of 355 billion yen ($3.6 billion) for the year to March 31, 2014, down from its earlier forecast of a 420 billion yen profit.

The cut comes despite a rise in profit for the April-to-September period.

Nissan said that conditions in Europe remained “sluggish” while demand in emerging markets had been “volatile”.

Nissan expects to make a net profit of 355 bn yen for the year to March 31, 2014, down from its earlier forecast of a 420 bn yen profit

“Nissan’s results reflect improved demand for our new products in Japan and the Americas,” Carlos Ghosn, chief executive of Nissan said in a statement.

“This was offset by difficult conditions in Europe, volatile demand in several emerging markets and higher expenses related to recalls.”

Nissan’s net profit for the six months to the end of September rose 6.5% from a year ago to 189.8bn yen.

The company also announced management changes, which it said were “designed to enhance Nissan’s performance and ensure the company will deliver the 8% operating profit margin target set out in the Power 88 mid-term plan”.

Under the changes, Nissan’s Chief Operating Officer Toshiyuki Shiga will become a vice chairman with responsibility for external affairs, asset management and corporate governance.

The office and functions of the COO will be reorganized among three senior executives, Nissan has said.