Nissan stays in red ink amid pandemic, Japan criminal trial

TOKYO (AP) – Japanese automaker Nissan reported yesterday losses for the fiscal third quarter, as its sales were hit by the coronavirus pandemic and its brand image continued to take a beating from the financial misconduct scandal centered on its former chairman, Carlos Ghosn.

Nissan Motor Co reported a JPY37.8 billion (USD360 million) loss for October-December, bigger than the JPY26 billion loss racked up the previous year.

Quarterly sales fell to JPY2.2 trillion (USD21 billion) from JPY2.5 trillion.

Nissan’s sales have been recovering from the hit they took earlier this year, when the pandemic slammed supply and demand.

But they still lag, at about a million vehicles for the quarter, down from 1.2 million vehicles a year ago.

Chief Executive Makoto Uchida told reporters the annual sales forecast was lowered to about four million vehicles from an earlier 4.2 million vehicles.

People walk past the corporate logo at Nissan Motor Co’s global headquarters in Yokohama, near Tokyo. PHOTO: AP

New models are in the pipeline, and attractive products will ensure better profitability, he said.

“Our new models are going to bring about a global sales recovery,” said Uchida.

Nissan is a co-defendant in a trial over financial misconduct allegations centred on under-reporting of Ghosn’s compensation. It acknowledged guilt in the case and was fined. Ghosn has fled Japan, jumping bail, while another former executive, Greg Kelly, an American, is on trial in Tokyo. Like Ghosn, he says he is innocent.

Ghosn is in Lebanon, which has no extradition treaty with Japan.

Also yesterday, Kelly’s defence attorney Yoichi Kitamura grilled a key witness for the prosecution, Hari Nada, a Nissan executive.

Kitamura repeatedly asked Nada about Nada’s involvement in discussions on Ghosn’s compensation, apparently seeking to show that Kelly had little say in determining the compensation and was trying to figure out legal solutions.

“Do you not believe Mr Kelly thought this would all be a plus for Nissan?” Kitamura asked of Kelly’s efforts.

Nada sometimes tried to evade the questions, saying he couldn’t remember. The testimony from Nada and other officials at the Tokyo District Court have detailed the options Nissan considered for compensating Ghosn after he took a pay cut in 2010 of about JPY1 billion (USD10 million) a year, or half of what he had been getting. The amount Ghosn was paid became a big issue for the company after Japan began requiring disclosure of big salaries.