NSANY Nissan Motor Company Ltd (PK)

By Yoko Kubota 

YOKOHAMA, Japan--Nissan Motor Co. said Monday that solid U.S. sales would offset any slowdown in emerging markets, including China, and underlined the point by raising its full-year profit forecast to a record level.

Nissan lifted its net profit outlook for the year through March 2016 by 10%, to 535 billion yen ($4.4 billion), a 17% increase from a year earlier.

Sales are running at the fastest pace in 15 years in the U.S., but they have slowed in China, the world's biggest auto market, after the stock market plunged. In many other emerging countries, where demand has already been weak, an expected interest-rate increase by the U.S. Federal Reserve is casting a further shadow.

"There are negative impacts from emerging markets, but we expect strong sales growth in developed markets that would outweigh the slowdown," said Hiroto Saikawa, Nissan's chief competitive officer.

In the U.S., Nissan and its Japanese and U.S. rivals are benefiting from strong sales of sport-utility vehicles, helped by a decline in fuel prices. SUVs tend to be more profitable than smaller cars, so the sales gains are boosting profitability despite softness in sales elsewhere.

Nissan's unit sales in the U.S. rose 5.6% year-over-year in the first nine months of 2015, outperforming the overall market, which grew 5%. The Rogue crossover SUV and the Altima sedan have been popular.

Nissan on Monday cut its 2015 China sales forecast by 50,000 vehicles, to 1.25 million, citing weak sales of commercial light vehicles. Nissan's January-September China sales rose around 2%, to 859,000 vehicles.

Nissan still expects the Chinese passenger car market to continue growing at about 5% to 6% in coming years, said Mr. Saikawa, who is the No. 2 official at the auto maker after Chief Executive Carlos Ghosn.

However, emerging markets are hurting Nissan, which has aggressively built new plants or expanded manufacturing capacity in recent years in countries such as Russia, Indonesia, Thailand and Brazil. In the six months through September, Nissan's Russian sales dropped 15.9% year-over-year. Its sales in Asia-Oceania, excluding China, declined 6.4% and its Latin American sales fell 2.5%.

In the July-September quarter, Nissan posted Yen172.8 billion in net profit, up 38% from a year earlier, beating estimates. Revenue was up 13%, to Yen3.0 trillion.

Nissan is the first among Japan's Big Three auto makers to announce second-quarter results. Honda Motor Co. will report Wednesday, followed by Toyota Motor Corp. on Thursday.

Mr. Saikawa also reiterated Nissan's concerns over the French government's expansion of its stake in Renault SA, which is the Japanese auto maker's biggest shareholder and alliance partner.

Earlier this year, France increased its Renault stake to 20%, a move that allowed the government to apply a newly passed law that doubles the voting rights of the state and other long-term investors.

Mr. Saikawa confirmed that Nissan had discussed the matter with the French and Japanese governments, but he said the company wasn't in a position to explain its strategy yet.

"What we somehow want to realize is that Renault continues to have autonomy and keep its position as our partner," Mr. Saikawa said.

Write to Yoko Kubota at yoko.kubota@wsj.com

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(END) Dow Jones Newswires

November 02, 2015 08:10 ET (13:10 GMT)

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