All three of Japan's biggest automakers are tightening their belts, anticipating even lower global sales in the fiscal year that started April 1, including a continuing sales downturn in North America.
Nissan on May 12 announced a net loss of $2.3 billion for its 2008 fiscal year, which ended on March 31, versus net income of $4.2 billion in the previous fiscal year. For the 2009 fiscal year that began April 1, Nissan expects a smaller net loss, of about $1.8 billion, despite lower unit sales.
Carlos Ghosn, Nissan president and CEO said in a May 12 press conference that Nissan will achieve this by cutting capital expenditures, research and development and inventories. Nissan is also pursuing longer-term initiatives such as reducing parts complexity and increasing the number of common parts among its vehicles, so that unit costs can be spread over bigger volumes.
Rivals Toyota and Honda are taking similar measures to slash budgets. To be sure, going on a strict diet sounds better than the emergency surgery Chrysler and General Motors are undergoing, and that Ford so far has narrowly avoided. Still, the situation constitutes a crisis for the Japanese brands.
Toyota last week posted a net loss of about $4.3 billion for the 2009 fiscal year, which ended March 31, 2009. Toyota said it expects an even wider net loss of about $5.8 billion for the 2010 fiscal year.
Unlike Toyota and Nissan, Honda has stayed in the black. Honda on April 28 reported net income of about $1.4 billion for its 2009 fiscal year just ended. For the 2010 fiscal year, Honda expects a thinner profit of about $420 million.
Critically, Honda's U.S. sales didn't fall as far as Toyota and Nissan in calendar-year 2008. Honda's U.S. sales fell 7.9 percent in 2008 to about 1.4 million in 2008, according to AutoData Corp. Toyota's U.S. sales fell 15.4 percent to 2.2 million; Nissan fell 10.9 percent to about 950,000.
U.S. sales of Honda's small, fuel efficient models like the Honda Civic and the Honda Fit increased last year while the market fell. U.S. sales of Honda's bread-and-butter model, the Honda Accord, fell only 5 percent in 2008, according to AutoData.
Like Toyota and Nissan, however, Honda also expects sales to keep falling in the current fiscal year.
Nissan's Ghosn said, "The crisis is ongoing."
Chart: Nissan (TIV = Total Industry Volume)