Nissan's market value evaporated by 13 billion overnight, "thanks to China"?

The market value of giant car companies evaporated by tens of billions overnight, and China is to blame?

Nissan, one of the former three Japanese giants, recently publicly stated that competition in China and other markets is fierce, and lowered its full-year sales forecast.

However, this downward adjustment caused Nissan's share price to fall by 11.6%, and its market value lost by 1.8 billion US dollars (about 12.948 billion yuan).

Among the three Japanese giants, will Nissan be the first to withdraw?

Nissan's market value evaporated by 13 billion overnight

Stock prices are falling for a reason.

On the day the stock price fell, Nissan released its financial results for Q3 of fiscal 2023 (October-December 2023).

Although as of the end of the reporting period, Nissan's performance in fiscal 2023 was generally good.

The cumulative global sales in the nine months were 2.44 million units, a year-on-year increase of 1.2%, and the net income was 9.17 trillion yen (about 441.792 billion yuan), a year-on-year increase of 22%.

In addition, operating profit also increased, reaching 478 billion yen (about 23.029 billion yuan), and the operating profit margin reached 5.2%.

However, when giving its forecast for the next phase, Nissan lowered its sales forecast, expecting full-fiscal sales of 3.55 million units, down 150,000 units from its previous forecast.

Although when explaining the reason for the downward adjustment, the company only said that due to the fierce competition in many markets and the sales performance in previous months, the sales forecast was lowered.

But if you look closely at how Nissan shows its sales in each market, you can see that the company is implying between the lines: If there was no Chinese market, we would have fared better.

For example, when talking about the specific quarterly performance, Nissan wrote: Although sales fell by 2.7% in the most recent quarter, if China is not included, sales will increase by 15%, and production will also increase by 13%.

Commenting on the company's sales in key markets, Nissan said that the increase in sales in Japan, North America and Europe helped offset the "challenging market environment" in China.

The poor quarterly sales performance of the co-authors is due to the Chinese market, and based on this sales performance, the sales forecast has been lowered.

But this downward revision has led to the largest decline in Nissan's stock price in 20 years.

The Chinese market is crazy, and Japanese joint ventures are complaining.

Nissan China dilemma

In fact, it is a fact that Nissan's performance in China is getting worse and worse.

Of all the markets, sales in China are declining year-on-year. In Q3 of fiscal 2023, sales were 188,000 units, a decrease of 35.6% year-on-year.

If the car does not sell well, it is nothing more than the loss of competitiveness of the product.

Looking at the models sold by Nissan in China, the main products are Sylphy, Qashqai, Teana, etc., all of which are 100,000-200,000 yuan, focusing on economical and practical products.

In particular, the generation of Sylphy, relying on reliability and durability, has gained a cumulative sales volume of 5 million units at a price of 100,000 yuan.

However, although this kind of cheap, fuel consumption is OK, and the configuration is OK, although it can still sell well in the past, it has no right to speak now when it is put into the crazy volume of its own brand.

Not to mention anything else, BYD alone won the pricing power of the 100,000-200,000 level market with monster-level products such as Qin 998 and Song PLUS DM-i, Xuanyi and X-Trail...... None of the Nissan Chinese models can be beaten. Sylphy, the only one that can be regarded as a good seller, will shrink its sales by 12% in 2023.

The share of fuel vehicles is constantly being eroded, but what about Nissan's new energy models?

One says that it is an electric hybrid, but it is actually an e-Power with an extended range, and when domestic range extender cars are on dozens of degrees of large batteries, Nissan is on a small battery of 2kWh.

Pure electric battery life is almost non-existent, and can only be used as a relay station for charging and discharging, shaving and filling valleys for fuel power; at the same time, it does not support high-voltage systems, and the charging and discharging power cannot go up.

Another pure electric model, Arrow, although based on a forward research and development platform, has four-wheel drive, and also has a 90kWh large battery, but it does not have a particularly outstanding performance level; at the same time, intelligent driving is still at the L2 level, and the intelligent cockpit has only reached the passing line.

It is no wonder that Nissan has been cutting prices in 2023, and the landing price of Sylphy Classic was once less than 80,000, and the price of Arrow has dropped again and again since its launch, and the reserve price in some areas is even less than 150,000, which is close to halving compared with the price when it was listed.

Nissan China, which once contributed 30% of Nissan's sales and net profits, has now been losing ground.

Nissan in China: From Bright Lights to Declines

To say that the time when Japan officially entered the Chinese market, it is not too early compared with the American and German systems, and Nissan is still a relatively late player.

In 2000, Fengshen Automobile, a joint venture between Dongfeng and Jing'an Clouded Leopard, was established, and Nissan's technology entered the Chinese market first. This company is the predecessor of Dongfeng Nissan, and it is also the main responsibility of Nissan's sales in China.

However, the joint venture between Dongfeng and Nissan, as well as the official establishment of Nissan's car manufacturing plant, waited until 2003, when other brands such as Toyota, Honda, and Suzuki had either already built factories or had already started production.

However, Nissan got off to a good start.

In the year of its establishment, Dongfeng Nissan sold more than 65,000 vehicles, and after a short run-in period, it stopped production and returned, and by 2005, the cumulative sales exceeded 300,000 vehicles, and the annual sales increased by 159% year-on-year.

Subsequently, with the continuous launch of models such as Sylphy, Qashqai and X-Trail, Dongfeng Nissan's sales continued to soar and set a new industry record by virtue of its economical and fuel-efficient cost performance, shortening the time to reach one million sales from 5 years and 3 months to 24 months and then to 12 months.

In 2015, Nissan China reached a milestone: annual sales exceeded one million. Until 2022, Nissan has always been a member of the "Million Club" in the Chinese market.

But the recession has quietly begun.

First, the three-cylinder technology killed a major sales pillar of the X-Trail, and when it was changed back to the four-cylinder, this once most popular SUV has lost its name.

There is also the rise of China's own brands, which is constantly pushing other Nissan models to a dead end.

The technology layout is one step late, the new energy transformation is one step late, and the step is too late to catch up, just as it was a little late to enter the Chinese market.

In 2023, Nissan's sales in China will be 793,800 units, a decrease of 24.05%, the first time in nine years that it will fall below the million mark.

But Nissan is clearly not reconciled.

After this earnings report, CFO Stephen Ma said that Nissan's goal is to stay in China and want to become a player in the Chinese market, preferably a sizable one.

So is there anyone in the comment area who is willing to support the move, how can Nissan stay in China?

-ENDS-

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