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Nissan Q3 drop seen limited as sales outpace rivals

Published 02/08/2011, 06:59 PM
Updated 02/08/2011, 07:04 PM

* Q3 operating profit seen down 15 pct at 113.9 bln yen

* Nissan's 485 bln yen FY profit forecast lags 534 bln yen consensus

* Q3 to drop less than Toyota, Honda on industry-beating sales

* Results to be announced at 0725 GMT

By Chang-Ran Kim, Asia autos correspondent

TOKYO, Feb 9 (Reuters) - Nissan Motor Co is expected to report a smaller decline in quarterly profit than its domestic rivals as a slew of new model launches helped Japan's No.2 automaker beat the industry's sales growth in key markets.

Nissan has been a standout particularly in China, where its line-up is heavy in smaller cars such as the Tiida compact, which qualified for tax incentives. Nissan was also among the only brands to grow in the tepid European market as consumers liked the new Juke crossover and demand stayed strong for the older Qashqai SUV.

Nissan's third-quarter operating profit is expected to fall 15 percent to 113.9 billion yen ($1.38 billion), according to a Reuters poll of eight analysts.

That would bring its nine-month profit within 36 billion yen of its annual forecast of 485 billion yen and could prompt Nissan to lift its forecasts, analysts said. A survey of 26 analysts by Thomson Reuters I/B/E/S put the annual profit at 534 billion yen.

Nissan's profits made in China are counted at the operating level, unlike for Toyota Motor Corp and Honda Motor Co , because it reports under Japanese accounting rules.

Chief Executive Carlos Ghosn has aggressively pushed Nissan into fast-growing markets such as China, India and Russia, and is credited for raising its profile as a pioneer in electric cars with the launch of the Leaf, the world's first mass-volume EV, in December.

In the third quarter, Nissan's global retail sales grew 15 percent, bringing its 2010 tally to a record 4.08 million units and ahead of Honda to rank second among Japanese automakers.

Nissan, owned 43 percent by France's Renault SA , also outperformed in the U.S. market but is set to face tougher competition this year as Toyota and Honda remodel top-selling cars such as the Camry and Civic.

A slowdown in China's overall car demand could also hit Nissan the hardest after the government pulled the plug on incentives on smaller cars at the end of 2010.

While analysts are bullish on Nissan's near-term growth prospects, Ghosn is under the gun to provide a clearer direction for partner Renault, which has struggled due to its heavy reliance on the sluggish European market. Renault is set to announce a new strategic six-year plan on Thursday.

Honda Motor Co last week posted a 29 percent fall in quarterly operating profit, while Toyota Motor Corp reported a 48 percent drop on Tuesday.

Shares in Nissan have risen 13 percent in the past three months, compared with 22 percent for Honda and 18 percent for Toyota. (Editing by Dhara Ranasinghe) ($1=82.32 Yen)

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