Nissan has revised its forecast for 2019 after reviewing its third-quarter reports on Tuesday. The multinational Japanese automaker had a 70 percent reduction in its quarterly profits. The automaker is cutting its forecast to its lowest in 11 years.
The company has been plagued by declining sales and a strong yen since CEO Carlos Ghosn was ousted nearly a year ago after charges of financial misconduct. There have also been ongoing tensions with Renault SA, Nissan’s top shareholder.
Nissan shares have been down by 19 percent this year. Shortly before the quarterly announcement, shares closed at 1 percent or 714.5 yen.
Japan’s second-largest automaker by sales also had an operating profit of 30 billion yen, or $275 million, from July through September. This was down from 101.2 billion yen one year ago.
Analyst estimates from Refinitiv compiled a mean forecast of 47.47 billion yen, while Nissan declared an interim dividend of 10 yen a share, down from a year ago at 28.50 yen.
Global vehicle sales also fell 7.5 percent for the quarter, or 1.27 million. It’s largest market, China, fell 2.5 percent while U.S. sales fell 4.5 percent.
Nissan also had its worst second-quarter results over the last 15 years. The company cut its interim dividend by 65 percent after those results.
There’s been lower demand for cars in both the U.S. and China. The two countries corner the global auto market. Competition has been higher, and disappointing sales in the first half of the year have put Nissan’s operating profit off-kilter for the year.
Stephen Ma, Nissan’s incoming CFO and current corporate vice president, said: “We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year.”
Ma was referencing Nissan’s slashing of its operating costs for the entire year, which the company cut by 35 percent to 150 billion yen. The company is now predicting global retail sales of 5.2 million vehicles, down from its previous forecast of 5.5 million. If proven accurate, this would represent Nissan’s worst sales in six years.
The company has been revamping its top leadership by bringing in younger executives like Ma. The Japanese automaker also wants to steer away from the image that years of fleet sales and discounted automobiles have left it. The company plans to reduce its cost by initiating a recovery plan to cut a tenth of its workforce as well as 10 percent of its production through 2023.
Nissan’s new executive team is supposed to take over on December 1. Based on current performances, the team will have their work cut out for them.