Higher Costs Hit Nissan Earnings in Second Quarter

According to Nissan, profits fell 7.9% in the second quarter of the year, due to rising commodity costs and unfavorable foreign exchange factors in emerging markets.

For the quarter from July to September, the second largest Japanese automaker, which has a partnership with the French groups Renault and Mitsubishi Motors, reported a net profit of 130.4 billion yen ($ 1.2 billion), against 141.6 billion yen a year ago. Revenues fell 2.6% to 2.82 billion yen.

The decline in profits came as Nissan tried to reduce inventories and overly use incentives to boost sales in the US, its main market.

Hiroshi Karube, chief financial officer, said steady progress had been made in reducing US inventories, but his efforts were overshadowed by the peak demand for cars and the uncertainty surrounding the global trade war.

"It takes longer and costs more than we expected when we revisit our efforts to improve the quality of sales in the United States," Karube said at a press conference on Thursday.

In the six months to September, sales in the United States decreased 9.1% from the previous year. While sales in Europe, excluding Russia, decreased by 14.3%.

For the fiscal year up to March 2019, Nissan has maintained its forecast of a 33% decline in its net profit, to 500 billion yen.