Nissan cuts profit forecast as it takes £65m Carlos Ghosn charge

The Japanese carmaker Nissan has cut its full-year profit forecast and taken a 9.2bn yen (£65m) charge related to the scandal around its former chairman Carlos Ghosn, who was arrested over allegations of financial misconduct and breach of trust.

Nissan said it had booked the charge to cover additional expenses linked to payments to Ghosn, in its first results since his arrest in November for allegedly under-reporting his pay by about 5bn yen between 2011 and 2015.

The carmaker lowered its 2018 forecast to an operating profit of 450bn yen, down from 540bn yen, after weaker global car sales. It now expects revenues of 11.6tn yen, rather than 12tn yen.

Nissan said it revised its full-year forecasts “given the performance in the first nine months of the year”, when its share of the global car market slipped 0.1 percentage point to 5.9%.

The carmaker sold 4.02m vehicles over the period, down 2.1%, with growth in Japan, China and other markets offset by declines in North America and Europe. Nissan did better in the three months to December, its third quarter, when operating profits rose 25% to 103.3bn yen. It expects to sell 5.6m vehicles over the year.

Ghosn, regarded as one of the titans of the global car industry until his fall from grace, rescued Nissan from the brink of bankruptcy two decades ago and forged a three-way alliance with Renault and Mitsubishi, which has come under pressure since the scandal erupted.

He was sacked by Nissan and resigned from Renault, where he was chairman and chief executive, three weeks ago, and is awaiting trial in Japan. He strongly denies any wrongdoing.

Although Renault and Nissan have vowed to keep their alliance, the scandal has heightened tensions between the French carmaker and its partners in Japan. Shortly before his arrest, Nissan executives were said to be unhappy about Ghosn’s plans to strengthen the company’s ties with Renault.

Renault’s chairman, Jean-Dominique Senard, will meet Nissan’s chief executive, Hiroto Saikawa, at the latter carmaker’s headquarters in Yokohama at the end of this week, in a second meeting aimed at restoring trust between the two companies.

There are tensions over Senard’s future position at Nissan. The French government, Renault’s biggest shareholder, wants him to lead the Nissan board. However, Nissan’s management is is waiting for an assessment by an internal governance committee created in December.

Christian Stadler, a professor of strategic management at Warwick Business School, said: “The departure of Carlos Ghosn, who was such a talismanic figure for Nissan, is likely to have a bigger effect during the year ahead, as the company attempts to address the distribution of power in its relationship with Renault. At the moment, Nissan is by far the bigger player in terms of sales.”