Nissan reports 83.2 bn yen loss in Q3; to cut 20,000 jobs

Hit by declining sales and the surging yen, Japanese auto-maker Nissan reported a net loss of 83.2 billion yen ($0.81 billion) for the third quarter ended December 31, 2008, compelling the firm to slash 20,000 jobs or about 8.5% of its workforce.

Further, the worsening state of the global economy and deterioration in global auto markets have led the company to forecast its first full year loss of 265 billion yen in nearly a decade for FY08 and projects net revenue of 8.3 trillion yen in the year. The company had a net income of 132.2 billion yen for the December quarter in the FY'08, Nissan said in a statement.

"The loss is driven by the severe downturn in the global economy in the second half of calendar year 2008 and, in particular, the negative impact of the strong yen, the sharp decline in consumer confidence in all major markets and product mix deterioration," it added.

During the quarter, net revenue stood at 1.81 trillion yen, down 34.4%.

Nissan has also announced recovery actions designed to enhance the company's performance during the current global economic and financial crisis.

"Global headcount will be reduced by 20,000 through FY 2009, reducing Nissan's headcount from 235,000 to 215,000", the car-maker said in the statement.

He company further said joint manufacturing projects with Alliance partner Renault in Morocco and India would be revised.

"In Chennai, the joint plant will proceed with a reduced ramp-up speed," it said.

Nissan sold 7,31,000 vehicles worldwide in the October to December 2008 period, down 18.6%.

Commenting on the quarterly results, Nissan president and chief executive officer Carlos Ghosn said for every plan of the company, the worst assumptions on the state of the global economy have come true or turned out to be even worse, with the continuing credit short age and declining consumer confidence being the most damaging factors.

Further, the company stated that there would be no bonus payments to the board of directors for 2008-09.

Salaries paid to board members and corporate officers would be reduced by 10% and those for managers in Nissan Motor Co and affiliate companies in Japan would be cut by five%.

Salary cuts would be starting next month and continue until the situation clearly improves, it added.

For the nine months ended December 31, 2008, Nissan posted a net income of 43.2 billion yen, down 87.5% compared with the previous year, while its net revenue fell 14.7% to 6.68 trillion yen.