February 21, 2014 at 10:14 am

Nissan says profitability to improve as U.S. margins recover

Nissan Motor Co. Chief Executive Officer Carlos Ghosn forecast profitability at Japan’s second- largest carmaker will improve in 2014 after the company missed out on the yen-led earnings boon at the nation’s exporters.

“You can bet on the fact that 2014 is going to see an improvement compared to 2013,” Ghosn said in an interview yesterday in the Bhutanese capital of Thimphu, where he announced a deal to supply Nissan’s electric Leaf hatchbacks for the government fleet. He declined to specify a figure.

Nissan, which earned more profit than any Japanese automaker two years ago, will probably generate lower margins than its domestic peers in the year ending March, while the weaker yen drives up earnings at companies such as Toyota Motor Corp. to record highs, according to analyst estimates compiled by Bloomberg. That’s partly as Nissan doled out higher incentives in the U.S. than any Asian automaker, resulting in North America income to fall.

Ghosn said he doesn’t expect high incentives to continue and for margins to rebound in the U.S.

“I can see profitability in the U.S. improving due to stabilization of our plants in North America because we have had a lot of expansion,” said Ghosn. “When you reach the stabilization level, the level of profit moves up.”

Ghosn, who in November overhauled his top executive team, said Nissan will announce additional management changes in mid- March as the carmaker pursues a target to raise its global market share to 8 percent and generate operating margins of 8 percent by March 2017, which Nissan calls its Power 88 plan. He declined to give more details on next month’s changes.

Ghosn is also CEO of French carmaker Renault SA.