Nissan Expects No Profit Growth due to Rising Cost of Raw Materials

Japan based car maker Nissan Motor Co. (TYO: 7201) has predicted a flat operating profit for the current financial year citing the increasing cost of raw materials, COVID restrictions in China and the global computer chip shortage.

This comes less than a day after its industry peer Toyota Motor Co. (TYO: 7203) announced that the rising cost of raw materials will slice up to 20% of its full year profit. Nissan joins the bandwagon of big companies which have been warning on declining profitability attributed to the sky rocketing input costs.

Adding salt to the injury, prolonged COVID lockdowns in China and the ongoing war between Russia and Ukraine will eventually create more supply chain snarl ups.

In the current financial year, Nissan expects its sales to increase by 18.7%10 trillion yen ($77.6 billion) and the operating profit to increase by just 1% to 250 billion yen which is way below the 318.5 billion yen estimated by analysts.

Nissan says the global computer chip shortage has caused its global production to drop for a fourth consecutive business year with the latest drop being an 11% year-on-year decline.

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