Nissan (NSANY) Incurs Loss in FY19, Issues EV Ariya Update

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Nissan Motor Co. NSANY announced fiscal 2019 results with consolidated net revenues of 9,878.9 billion yen, down 14.6% year over year. The Japanese auto biggie incurred a net loss of 671.2 billion yen — its first annual loss since 2009. This marks the company’s biggest loss in two decades. The downside was mainly due to the COVID-19 pandemic, which marred the company’s production, sales and other business activities across all regions. Notably, Nissan’s global production and sales units in 2019 came in at 4.96 million and 5.18 million, marking a year-over-year decline of 9.6% and 8.4% respectively.

Other Japan-based automakers, Toyota Motor TM and Honda Motor Company HMC have also been affected by the pandemic, causing declines in sales and earnings across all of their major markets. While in fourth-quarter fiscal 2020, Honda’s revenues declined 13.6% year over year to $31,752 million, Toyota recorded consolidated revenues of $65,190.6 million, down 7.3% year over year.

As a member of the world's largest car-making alliance, Nissan, along with Renault SA RNLSY and Mitsubishi Motors, recently announced several initiatives as part of a new business model of cooperation focused more on efficiency and competitiveness than on volumes.

The companies will reduce the overall number of models being sold, use shared platforms for production, and focus on their existing geographic and technological strengths. These firms are aimed at cutting costs and boost profitability amid the coronavirus pandemic. Nissan aims to reduce its global production capacity by 20% and close a facility in Barcelona. It might also cut 20,000 of its workforce in a bid to survive the coronavirus crisis.

Meanwhile, Nissan has announced plans to launch the production version of the company’s all-electric compact SUV battery-electric vehicle (BEV), Ariya, in July 2020, a few months ahead of its production and delivery dates. The latest model features Nissan's fresh corporate styling, 21-inch wheels, a dual-engine all-wheel-drive system and is expected to offer a maximum range of about 300 miles.

Ariya, which will be developed on an all-new dedicated BEV platform, is anticipated to begin production in Japan by fourth-quarter 2020, followed by factories in the United States and the U.K. Production in the U.S. dealerships is likely to start either by fourth-quarter 2020 or in first-quarter 2021.

The latest model is said to be unique in the Nissan portfolio as it will be sold in Japan, China, Europe and the United States. While sales in Japan could begin a month or so earlier than in the United States, sales in Europe are expected to take place at around the same time.

Apart from Ariya, Nissan is planning to roll out the company’s big three-row traditional SUV, Armada; global mid-size pickup truck, the Navara and the Versa-based hatchback, the Versa Note. Other upcoming models include, the Nissan Terra, Pathfinder, Qashqai, Rogue, X-Trail, and Z sports car.

Nissan currently carries a Zacks Rank #4 (Sell).

Shares of Nissan have depreciated 30.6%, year to date, wider than the industry’s decline of 14.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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