Japanese automaker Nissan Motor (NSANF) has announced plans to cut 9,000 jobs and reduce its global production as it battles rising competition in China and the U.S.
Nissan, which is Japan’s third biggest automaker, cut its outlook for its annual operating profit by 70% to 150 billion yen (US$975 million), marking its second downward revision this year following a previous 17% cut to the forecast.
The lowered outlook and operational cuts come as the company reported that its global sales declined nearly 4% to 1.59 million vehicles for the first half of its financial year, due largely to a 14% plunge in China where it faces increased competition from local automakers.
U.S. Sales Decline
Nissan is also seeing a decline in its U.S. sales, which fell nearly 3% to about 449,000 vehicles in its most recent quarter. Combined, China and the U.S. account for nearly half of Nissan’s global sales by volume.
Management at Nissan said that it is seeing strong demand for gas/electric hybrid vehicles but did not have the hybrid and plug-in hybrid models Americans want in the most recent quarter. The company said it would adjust the models it sells in the U.S. market moving forward.
Nissan stock is down 36% so far this year.
Is NSANY Stock a Buy?
Nissan Motor stock has a consensus Moderate Sell rating among four Wall Street analysts. That rating is based on no Buy, one Hold, and three Sell recommendations issued in the last three months. The average NSANF price target of $2.43 implies 6.54% downside from current levels.
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