TOKYO - Nissan Motor returned to profitability in the April-June quarter of 2026, posting net income of 3.761 billion yen as cost-cutting measures and a weaker yen helped the struggling automaker end eight consecutive quarters of losses.
The result marked a sharp turnaround from a net loss of 115.7 billion yen in the same period a year earlier and provided an early sign that Nissan's latest restructuring efforts are beginning to support earnings.
Cost reductions, a central pillar of the company's management recovery plan, contributed to the improvement, while the weaker yen raised the value of profits generated overseas when converted into Japanese currency.
Global vehicle sales nevertheless fell 0.9% from a year earlier to 701,000 units, showing that the return to profit was driven more by lower expenses and currency movements than by broad growth in demand.
Sales increased in China, North America and Japan, the three markets Nissan regards as strategically important, but the company continues to face intense competition, particularly in China, where domestic manufacturers have expanded rapidly in electric vehicles and plug-in hybrids.
The modest quarterly profit stands in contrast to the far larger earnings Nissan generated during much of the previous two decades.
In the mid-2000s, Nissan regularly posted annual net profits of more than 400 billion yen after an extensive turnaround led by former Chairman Carlos Ghosn. The company benefited from factory closures, workforce reductions, tighter purchasing controls and closer cooperation with French automaker Renault.
Nissan recorded a net profit of 518.1 billion yen in the fiscal year that ended in March 2006, followed by profits of 460.8 billion yen and 482.3 billion yen over the next two years. Strong global demand, expanding sales in North America and Asia, and strict cost management supported earnings.
That period ended abruptly with the global financial crisis. Nissan posted a net loss of 233.7 billion yen in the fiscal year ended in March 2009 as vehicle demand collapsed, credit markets tightened and the stronger yen reduced the value of overseas revenue.
The company returned to a small profit the following year after cutting production, inventories and expenses. Earnings then recovered steadily as global auto sales rebounded.
From fiscal 2010 through fiscal 2015, Nissan generally reported annual net profits of between 300 billion yen and more than 500 billion yen. Growth in China and the United States, favorable exchange rates and rising worldwide vehicle sales supported the recovery.
Profit reached 663.5 billion yen in fiscal 2016, helped by the sale of Nissan's stake in auto parts supplier Calsonic Kansei. Net income then climbed to 746.9 billion yen in fiscal 2017, the highest level of the period, although the result was boosted substantially by changes to U.S. corporate tax rules.
The record earnings masked weaknesses that later became more visible. Nissan had pursued aggressive sales targets, particularly in the United States, where it relied heavily on fleet sales, discounts and dealer incentives to expand market share.
Those practices supported vehicle volumes but weakened prices, resale values and profit margins. At the same time, parts of Nissan's model lineup were aging, while the company had built factories and production capacity for sales levels it could not sustain.
Net profit fell to 319.1 billion yen in fiscal 2018 as sales slowed and incentives increased. Management instability following Ghosn's arrest in November 2018 added further pressure and disrupted decision-making within Nissan and its alliance with Renault.
The deterioration accelerated in fiscal 2019, when Nissan recorded a net loss of 671.2 billion yen. Falling sales, low factory utilization, restructuring expenses and large impairment charges weighed heavily on the result.
Nissan entered the coronavirus pandemic in a weakened position. Plant shutdowns, supply-chain disruptions and a collapse in worldwide vehicle demand contributed to another net loss of 448.7 billion yen in fiscal 2020.
The company responded with its Nissan NEXT restructuring program, which aimed to reduce fixed costs, close or scale back factories, cut unprofitable sales and concentrate investment on key vehicles and markets.
The program shifted Nissan's focus away from maximizing sales volume and toward improving revenue and profit on each vehicle sold.
Those measures, combined with recovering demand and higher vehicle prices during the global semiconductor shortage, returned Nissan to a net profit of 215.5 billion yen in fiscal 2021.
Net profit rose slightly to 221.9 billion yen in fiscal 2022 and then nearly doubled to 426.6 billion yen in fiscal 2023 as production recovered, supply constraints eased and the weaker yen supported overseas earnings.
The improvement proved temporary.
Nissan continued to lose ground in China, where buyers moved rapidly toward electric vehicles and plug-in hybrids made by local manufacturers. Japanese automakers that had previously dominated the market struggled to keep pace with lower-priced Chinese brands offering advanced batteries, software and digital features.
In North America, Nissan again came under pressure to offer incentives as its product range faced competition from newer gasoline-electric hybrid vehicles and sport utility vehicles from Toyota Motor, Honda Motor and other rivals.
The company also faced the expensive task of investing in electric vehicles, battery technology, software and new gasoline-powered models at the same time.
Weak sales and low profitability forced Nissan to write down the value of factories and other assets. Large impairment and restructuring charges pushed the company back into heavy losses in the two fiscal years preceding the latest quarterly result.
The April-June profit of 3.761 billion yen is therefore small compared with the hundreds of billions of yen Nissan earned annually during its strongest years.
It also remains unclear whether the company can maintain profitability without continued support from the weaker yen or further large-scale cost reductions.
Nissan's challenge is no longer limited to reducing expenses. The automaker must also refresh its model lineup, improve its competitiveness in electric and hybrid vehicles, restore pricing power in North America and slow its decline in China.
The increase in sales across China, North America and Japan during the latest quarter offers some encouragement, even as worldwide sales remained lower.
For Nissan, the end of an eight-quarter losing streak represents an initial step toward financial stability, but a sustained recovery will depend on whether cost-cutting gains can be matched by stronger products and lasting growth in vehicle sales.
Source: テレ東BIZ
