After new energy vehicles became popular, traditional car companies, including Nissan Motor, seem to have been unpopular, and public opinion has always been one-sided in affirming independent new energy vehicles. However, in terms of earning power, it depends on traditional car companies. Recently, Nissan Motor released its revenue data for fiscal year 2023, with operating profit increasing by 51% year-on-year to 568.7 billion yen (26.13 billion yuan), operating profit margin also increased from 3.6% in the previous year to 4.5%, and net income also reached 426.6 billion yen (about 19.6 billion yuan).
At present, the automotive industry is in an era of micro-growth, and the price war strategy of car companies is continuing to roll in. So, what is the secret of Nissan's money-making money?
Doubled profits for the fiscal year
Nissan Motor will have a consolidated net income of 12.686 trillion yen (about 582.78 billion yuan) during this period of time, and an operating profit of 568.7 billion yen (about 26.13 billion yuan), a year-on-year increase of 51%, during this period. The net income was 426.6 billion yen (about 19.6 billion yuan), an increase of 92.25% from 221.9 billion yen in the same period last year, almost doubled.
What is this concept? Let's review the sales king BYD's financial report last year, with revenue of 602.315 billion yuan and net profit of 30.041 billion yuan. In other words, Nissan's revenue level is very close to BYD. Although Nissan's market share of fuel vehicles is gradually eroded by the new energy vehicles of independent car companies such as BYD, Nissan's revenue level is unrivaled in the market.
There are three keys to Nissan's revenue growth: the depreciation of the yen, the growth of sales, and the reduction of costs. Since the beginning of this year, the yen's exchange rate has continued to fall below the 140 yen/dollar and 150 yen/dollar mark, until now it is approaching 160 yen/dollar. For auto companies, exchange rate changes are an invisible factor that affects profit figures. It is reported that for every 1 yen depreciation of the yen against the U.S. dollar, the current profits of major companies such as automobiles and chemicals will rise by 0.3%, and this depreciation will help Nissan Motor's profits increase.
Of course, Nissan's own competitiveness cannot be ignored. According to statistics, in this fiscal year, Nissan sold 3.44 million vehicles worldwide, which was slightly lower than expected, but still higher than the previous year's 3.3 million units. While the model is selling well, Nissan's fixed costs for R&D and manufacturing have also been further controlled, resulting in good earnings in fiscal 2023.
As for the performance trend of fiscal year 2024, Nissan Motor is expected to further increase by about 7.21%, with operating income of 13.6 trillion yen (about 631.1488 billion yuan), operating profit of 600 billion yen (about 27.847 billion yuan), and net income of 380 billion yen (about 17.635 billion yuan).
In order to achieve its FY2024 target, Nissan Motor Co., Ltd. has been fully promoting The Arc arc plan in April this year. The core of this plan is to use the power of electric vehicles to further increase sales, and will meet the diversified demand for new energy products through a more balanced product layout.
However, from the perspective of Nissan's sales structure, the proportion of new energy vehicles is not high, and at the same time, China, the world's largest new energy vehicle market this year, is also intensifying.
The transition to electrification is stressful
As early as December 2010, Nissan launched its first electric vehicle, the Leaf, and went to the market, and achieved good sales results after its launch, with sales reaching 400,000 units in 2019. However, due to the slow pace of updating the local electrification industry chain and the three-electric technology, the Leaf has not been able to effectively improve Nissan's profit margin in the field of electric vehicles.
Until 2022, Dongfeng Nissan brought a pure electric SUV model - ARIYA. This car has good strength, but compared with Nissan's fuel vehicles, there is a gap in market sales, which also means that the rapid introduction of new energy models that can support sales growth is very important for Nissan.
According to Nissan's plan, it plans to increase sales of another 1 million vehicles by the end of fiscal 2026, and by fiscal 2026, it will launch 30 new models, of which 16 are electric vehicles and 14 are internal combustion engine models, and achieve cost parity between electric vehicles and gasoline vehicles by 2030. Nissan's Vision 2030 clearly states that it will launch 27 electric vehicles globally by fiscal 2030, including one designed specifically for the Chinese market.
As for the new energy vehicle plan for fiscal 2024 and fiscal 2025, there is not much information, after it was reported that the first self-developed new energy vehicle of the Nissan brand will be launched in the second half of 2024, but there is not much information about the new model.
Perhaps Nissan's direction in fiscal 2024 and fiscal 2025 will still be dominated by fuel vehicles, but it is certain that Nissan is paving the way for future new energy planning, and a number of senior personnel appointments in March this year will accelerate the implementation of Nissan Motor Company's electric drive and marketing strategy. In addition, Nissan Motor Co., Ltd. has signed a memorandum of understanding (MOU) with Honda Motor Co., Ltd. to fully cooperate in the electric vehicle business, and plans to reduce costs and enhance the competitiveness of electric vehicle products through resource integration. To put it bluntly, Nissan's electrification transformation is already in the accumulation stage.
Of course, Nissan's strategic adjustment in the Chinese market will be a long-term process. As EV technology continues to advance and consumer needs change, the company is constantly exploring and adapting to new market trends while remaining competitive. Whether it is by adjusting production capacity or strengthening its layout in the field of electric vehicles, Nissan will face the challenge of transformation.
Multinational car companies do not lie flat
Nissan's performance in the market is the epitome of joint ventures. In the past two years, independent brands have accelerated their occupation of the market with new energy vehicles, and the dominance of joint venture brands is being broken. The performance of joint venture energy vehicles is poor, and there are no new popular models in the fuel vehicle market, so the overall market share continues to decline.
Compared with independent brands, the transformation speed of joint venture brands in the field of new energy is too slow. In fact, it is no coincidence that the joint venture brand lags behind on the new energy track. It is important to know that overseas car companies are aimed at users in the global auto market and will not develop new models specifically for a single market. Although the field of new energy vehicles in the mainland automobile market is full of opportunities, the market share of new energy vehicles in overseas markets is still relatively large, and fuel vehicles are the largest sales volume, which is the longboard of joint venture car companies.
Although the joint venture car company has slowed down in the new energy vehicle market by half a beat, this does not mean that the joint venture brand has lost its product competitiveness and brand discourse. The technology accumulation of joint venture brands in fuel vehicles is currently beyond the reach of independent brands. As long as the sale of fuel vehicles is not banned, joint venture car companies still have a place. In addition, the joint venture brand that has been building cars for many years has a good reputation and production capacity, a huge system and a good market share, which determines that the market performance of joint venture cars will only experience short-term shocks, and it is unlikely to decline in the long term.
Whether it is the manufacture of fuel vehicles or the development of new energy vehicles, it is a marathon, and no one can say who will be the final winner until the end. Although independent brands have taken the lead in the new energy vehicle market, do not underestimate their opponents, including Nissan Motor, overseas car companies, which have a big business and have not been idle, have continued to invest resources in the field of new energy vehicles, and their next counterattack on electric vehicles will be more powerful.
At present, the Chinese market has become one of Nissan's core markets in the world, and although Nissan Motor has achieved good earnings in fiscal 2023, the pressure it faces cannot be underestimated. Of course, independent brands are far from the time to raise a glass and celebrate. Multinational car companies with a long history and strong strength have overcome difficulties and setbacks much longer than Chinese automobiles, and they have survived the great changes of the times one by one. As it turns out, they're not that vulnerable, either.