Nissan Motor Co reported a 7.2 percent rise in quarterly operating profit on Thursday and said global production disrupted by Japan's March 11 earthquake will return to normal at least a month earlier than predicted by bigger home rival, Toyota Motor Corp.
A resolution to the parts bottleneck for all automakers is closer than it appeared just a week ago, with Toyota announcing on Wednesday that production would gradually begin to normalize in June, as much as two months earlier than expected.
Renesas Electronics Corp, the chipmaker at the heart of the disruption and a major supplier of microcontroller units to Nissan, also said that shipments would fully recover by the end of October.
Like its peers, Nissan, Japan's No.2 automaker offered no outlook for the business year to March 2012, citing some remaining uncertainties over the pace recovery lower down in the supply chain.
I think the picture of our own plants now is stabilized, but the picture coming from the suppliers is still being worked on, Nissan CEO Carlos Ghosn told a news conference. He said the availability of electricity from nuclear power plants was also a concern.
If we have no cars, there's no way you're (not) going to lose market share, he said.
It's unfortunately very frustrating for everybody, but in reality people need cars and are not going to wait for us for six months. We're going to have to accept the fact that in some markets we're going to have significant loss in market share.
Ghosn stressed, however, that Nissan's sales momentum was among the strongest in the industry until the quake struck, and that he expected that momentum to return when parts supply was no longer an issue from October.
The bottom line is there is no doubt for me that from what we're seeing today...2011 should be a progress in terms of sales compared to last year, he said.
Nissan plans to provide its forecasts for the current business year to March 2012 before its annual shareholders meeting, usually at the end of June.
January-March operating profit at Nissan was 88.6 billion yen ($1.1 billion), better than an average forecast of 78.9 billion yen in a survey of analysts who revised their numbers after the quake, according to Thomson Reuters I/B/E/S.
Nissan, unlike Toyota and Honda Motor Co, reports under Japanese accounting rules and its profits from China are included at the operating level. Nissan's quarterly net profit was 30.8 billion yen, reversing from a year-ago loss of 11.6 billion yen.
Nissan, which relies far less than Toyota on home production, benefited from a rise in revenue that helped it overcome an extraordinary loss of 39.6 billion yen resulting from the quake.
A consensus of 16 analysts put Nissan's operating profit at 280.0 billion yen for the 12 months. The forecasts ranged from 34 billion to 638 billion yen.
Until the 9.0-magnitude earthquake and tsunami that destroyed much of Japan's northeastern coast, Nissan had been on a steady growth path as CEO Ghosn pushed the automaker into fast-emerging markets such as China, India and Russia. Ghosn also had been raising Nissan's profile in the green-car field with the launch of the Leaf electric car.
Analysts have lauded Nissan for its aggressive drive to build a global network for production and parts procurement, including through its alliance with Renault SA. Following its transfer of March/Micra production to Thailand last year, Nissan is Japan's top car importer so far this year, outpacing Volkswagen AG.
Renault's participation in Nissan's management has allowed the Japanese car maker to become more open and global than its Japanese peers, said Park Sang-won, an analyst at Eugene Investment in Seoul. Renault has been reducing domestic production following its participation in Nissan management.
Like Toyota, Nissan has stressed its intention of keeping a certain level of production in Japan even in the face of a strong yen, high labor costs, a shrinking domestic car market and now the myriad risks posed by natural disasters.
Ghosn, also CEO of Renault, reiterated his pre-quake pledge to maintain output in Japan at 1 million vehicles.
Without retracting that pledge, however, Nissan has sought more ways to shift production out of Japan, including moving the Rogue crossover and Infiniti JX SUV to the United States.
Nissan's shares have held up relatively well since the quake, losing 3.9 percent as of Wednesday, compared with falls of 10.4 percent for Toyota and 7.9 percent for Honda.
Before the results were announced on Thursday, Nissan shares ended the day up 1.4 percent at 795 yen.
($1 = 81.065 Japanese Yen)
(Additional reporting by Hyunjoo Jin in SEOUL and James Topham in TOKYO; Editing by Edmund Klamann and Matt Driskill)