Japan's Nissan sees profit for latest quarter but warns of Middle East and China woes
Japan's Nissan sees profit for latest quarter but warns of Middle East and China woes
Nissan Motor Co. reported a net profit of ¥210 billion for the quarter ending June 30, 2026, marking a 12% increase year‑on‑year and a return to profitability after a challenging 2025. Revenue rose to ¥10.2 trillion, driven by strong sales of its new electric models in Europe and North America.
Despite the upbeat earnings, the automaker cautioned that its outlook remains clouded by “significant headwinds” in the Middle East and China, regions that together account for roughly 30% of Nissan’s global sales.
Middle East challenges
- Reduced demand for passenger vehicles amid ongoing geopolitical tensions and fluctuating oil prices.
- Supply‑chain disruptions at key component factories in Saudi Arabia and the United Arab Emirates.
- Currency volatility affecting pricing and profitability.
China concerns
- Slower adoption of electric vehicles due to recent regulatory tightening and subsidy reductions.
- Intensified competition from domestic EV makers launching lower‑priced models.
- Potential impact of new trade policies on Nissan’s joint‑venture operations.
CEO Makoto Uchida said, “We are pleased to have returned to profit, but we cannot ignore the macro‑economic pressures in two of our largest markets. Our strategy will focus on cost efficiency, localized production, and accelerating our EV roadmap to mitigate these risks.”
The company outlined several measures to address the challenges:
- Accelerating the rollout of the Aria EV platform with a target of 1.5 million units sold globally by 2028.
- Increasing local sourcing in China to reduce exposure to tariff fluctuations.
- Launching a flexible financing program in the Middle East to support fleet buyers.
- Implementing a ¥500 billion cost‑reduction plan over the next two years, focusing on automation and lean manufacturing.
Analysts at Nomura noted that while Nissan’s profit recovery is “a positive sign of operational resilience,” the “Middle East and China outlook remains a material risk that could weigh on earnings through 2027.”
Looking ahead, Nissan reaffirmed its full‑year earnings guidance of ¥800 billion to ¥850 billion, contingent on stabilizing demand in the highlighted regions and continued momentum in its electric vehicle portfolio.