There's still hope despite £1.58bn loss
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The Japanese car maker which announced at the weekend it was creating 150 temporary jobs at its Washington plant to meet demand from Europe, made the massive annual loss of £1.58bnfor the year to the end of March – after reporting a £3.26bn profit in 2008.
However, the loss announced yesterday was better than analysts had predicted and Nissan – which axed 1,200 jobs in Sunderland this year – is now aiming to reduce the deficit by £405m next year.
Nissan president and chief executive Carlos Ghosn said: “The global economic recession and financial crisis continue, but we are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence.
“We remain cautious about the economic environment and fully focused on our company’s recovery efforts.”
The company has been hit hard by the near collapse of the global new car market but its 22% drop in sales to £57bn was better than initially forecast.
Nissan sold 3.4 million vehicles worldwide – a drop of 9.5% on the previous year. The US market was worst hit, with a 19.1% fall in sales, followed by Europe where they dipped by 16.7% to 530,000 cars. However, sales rose in China.
The 1,200 job losses in Sunderland were followed by an announcement that 20,000 would go internationally this year. Nissan employs 4,800 British staff spread across its Sunderland plant, UK head office in Hertfordshire, European design headquarters in west London and an engineering site in Bedfordshire.
Mr Ghosn said: “2009 will be another challenging year. Our priorities will be preserving cash, improving our profitability and pursuing deeper synergies within the Renault-Nissan Alliance.
“We are balancing short and long-term objectives to manage through the crisis and to prepare for the future.” The group expects sales to dip to 3.08 million cars this year but is pushing ahead with the launch of eight new models. It also expects the UK’s scrappage scheme, which gives buyers money off new cars if they scrap models at least 10 years old, to drive up demand.
The success of similar schemes on the Continent boosted Nissan’s sales by 31% in France last month, by 21% in Italy and 9% in Germany.
The temporary jobs being created in Sunderland from June will be four-month contracts to make around 14,000 extra cars to meet this extra demand.
But Professor Garel Rhys, the recently retired director of the Centre for Automotive Industry research at Cardiff Business School, said it would be a long time before the car industry returned to the “heady days of 2007”.
“The car market in Europe, Britain and indeed the world is not going to start to recover until at least 2011,” he said.
“I think they are being a little optimistic. We haven’t seen the worst in the car market. All the vehicle makers know that.”
