quarta-feira, 14 de fevereiro de 2024

Nissan shares see biggest plunge in 2 decades as China worries deepen

Nissan's shares took a nosedive of 12 percent, marking their most significant drop in over two decades, following disappointing quarterly earnings and a downward revision of car sales estimates, primarily attributed to intense competition in China's auto market.

The rise of homegrown Chinese brands like BYD, focusing on affordable electric vehicles tailored for younger consumers, has steadily eroded market share for foreign competitors in China, once Nissan's largest market.

James Hong, head of mobility research at Macquarie, highlighted Nissan's vulnerability in China compared to its Japanese counterparts, Toyota and Honda.

"They feel the most pressure," he said. "Many Chinese makers are becoming more and more aggressive and obviously chasing market share."

Nissan's market value plummeted by US$1.8 billion as its third-quarter operating profit fell short of analyst expectations, prompting a cut in its global vehicle sales outlook. Chief Financial Officer Stephen Ma attributed this to underperformance in China and heightened competition in other key markets, such as the United States.

Amidst cut-throat competition forcing price reductions in China, Nissan faces the grim prospect of a "zero-margin business" with declining revenue per vehicle in the region. Shinya Naruse, a senior analyst at Okasan Securities, suggests a recovery strategy tailored to Chinese preferences, which could take several years to materialize.

To adapt to the Chinese market, Nissan plans to export vehicles from China to overseas markets in 2025, aiming for annual volumes of 100,000 to 200,000 vehicles initially. Meanwhile, Honda seeks to optimize its manufacturing capacity in China, although the potential returns remain uncertain.

Despite challenges, Ma expressed optimism about regaining sales momentum in China, focusing on regions with slower electrification rates. "We aim to stay in China and we want to be a relevant player and a sizeable player in China," he said. 

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