Nissan aims to double China Infiniti sales in luxury drive

Nissan Motor Co expects to double sales of its Infiniti-brand vehicles in China this year as demand for luxury cars grows in the world’s largest car market.

Japan’s second-largest automaker also plans to unveil a strategy for increasing luxury car sales in other emerging markets as part of its mid-term business plan next week, Chief Executive Officer Carlos Ghosn told reporters in Yokohama today. The carmaker sold about 160,000 Infiniti cars globally last year, well below rival Toyota Motor Corp’s deliveries of about 400,000 Lexus cars, he said.

“Infiniti has big potential for growth,” Ghosn said.

Nissan forecasts its global vehicle sales may rise 9.9 per cent to 4.6 million this fiscal year, the company said earlier today. The Yokohama-based carmaker expects “balanced growth” globally through higher sales of compact cars such as the Micra as well as through luxury cars, in addition to continued strength in mid-segment models, Ghosn said.

The company’s mid-term plan will cover a six-year period and also outline its strategy for expansion in Brazil, he said.

Separately, Nissan today predicted it expects full-year profit to fall 15 per cent after the nation’s record earthquake disrupted production and sales while the yen strengthened.

Net income may decline to ¥270 billion ($3.4bn) in the 12 months ending March 31 from ¥319.2bn a year earlier, the company said in a statement. The projection is higher than the ¥263.4bn average of 22 analyst estimates compiled by Bloomberg.

Japanese automakers are boosting production as they recover from the March 11 natural disaster that damaged car factories and parts plants, leading to a 60 per cent plunge in domestic vehicle output in April. Nissan expects to resume full production globally by October.

“Nissan can’t expect much profit from Japan because of the quake, or from North America, because the major indicators like GDP and the unemployment rate aren’t very positive,” said Yuuki Sakurai, president at Fukoku Capital Management Inc. in Tokyo. “Nissan should try to expand in China, Russia and other emerging markets.”

The automaker’s sales in China may rise 12 per cent to 1.15 million vehicles this year, while North American sales may gain 6.8 per cent to 1.33 million, Nissan said. Deliveries in Japan are expected to grow 1.7 per cent to 610,000, while those in Europe may gain 10 per cent to 670,000, the company said.

The carmaker aims to increase its share of the US market to 10 per cent, Ghosn said, without providing a timeframe.

Nissan plans to increase Japanese production of its higher- value models including the Infiniti brand, electric cars and light commercial vehicles to help cope with the yen’s appreciation, Ghosn said. The carmaker will also source more parts from China and Thailand for its plants in Japan, he said.

Full-year operating profit is expected to drop 14 per cent to ¥460bn, Nissan said. Higher selling expenses and marketing may cut operating profit by ¥112bn, while the strengthened yen, which reduces the repatriated value of overseas earnings, may trim operating profit by ¥135bn.

The Japanese currency advanced 15 per cent against the US dollar last year and reached a postwar record of 76.25 on March 17. Nissan is basing its profit forecast on an exchange rate of ¥80 to the dollar and ¥115 to the euro this fiscal year.

Nissan and its partner Renault SA expect to reach agreement on acquiring an additional 25 per cent stake in OAO AvtoVAZ by the end of the year, Ghosn said. The two companies were in talks with the Russian carmaker’s shareholders to increase their holdings and secure control of the company, Troika Dialog, one of the investors in AvtoVAZ, said in March.

Nissan plans to modernize an existing AvtoVAZ plant in Russia to increase production capacity, Ghosn said. The alliance, which plans to focus on Renault’s expansion in Russia, also hopes to benefit from AvtoVAZ’s supplier network, he said.