Nissan establishes mutual parts supply network in Japan, Korea and China

Ready to increase sales in Japan with all-new mini-vehicles and hybrid vehicles

2013/07/09

Summary

Infiniti Q50
The Infiniti Q50 whose production started at
Tochigi Plant in May 2013 (Auto Shanghai 2013)

 This report outlines Nissan's non-consolidated and consolidated financial results for FY2012 and production and sales enhancement plans in the Japanese market.

 To reduce the impact of yen's high appreciation that lasted through the fall of 2012, Nissan has centralized over 60% of its domestic production to the Kyushu district and has been constructing a mutual supply network for parts among the Kyushu-Chugoku district in Japan and Busan in Korea (Dalian in China will be included in the near future). At Nissan, the total of parts procurement from suppliers in the Kyushu-Chugoku district in Japan and overseas near Kyushu area is referred to as "local procurement ratio." The ratio increased from 71% to 85% with the all-new Note whose production began in the summer of 2012. Nissan is operating under the policy to keep its domestic production at 1 million vehicles primarily in Kyushu.

 Nissan's domestic production recovered its cost competitiveness after the correction of superstrong yen in 2013 and the company's non-consolidated results for FY2012 reported the first operating profit in five fiscal years. However, Nissan is firm about abiding by its principle of constructing a business structure that is not affected by fluctuation in foreign exchange.

 While the total  market demand for vehicles in Japan increased by 460,000 units from 4,750,000 units in FY2011 to 5,210,000 units, Nissan's domestic sales declined from 655,000 to 647,000 units (with the market share falling from 13.8% to 12.4%).

 Nissan's sluggish domestic sales in FY2012 are said to result from two factors; its short supply capacity for mini-vehicles whose market is growing rapidly and the Serena S-HYBRID (Simple Smart Hybrid) is the only hybrid vehicle by Nissan in the hybrid vehicle market that is also expanding rapidly. Nissan is set to address these two situations. As for mini-vehicles, the DAYZ, the first mini-vehicle developed jointly with Mitsubishi Motors, was released for sale in June 2013. As for hybrid vehicles, Nissan plans to introduce 15 new models by FY2016.

 Nissan's consolidated financial results for FY2012 showed that Nissan was the only one among the seven Japanese passenger car automakers that registered a decline in operating profit. The decline reflected the effect of the anti-Japan demonstrations in one of Nissan's main markets, China, and a supply chain problem in the U.S. market. The vehicle sales fell 62,000 units from the original projection and the market share in the U.S. declined from 8.2% in FY2011 to 7.7% in FY2012. A separate report is coming for the trends of Nissan's overseas operations.


 (Note) The "mini vehicle" is a unique category in Japan of vehicles with piston displacement of 660cc or less, overall length up to 3.4 meters or overall width up to 1.48 meters. The mini vehicles represent over one third of the Japanese automobile market because of tax privileges in addition to the low purchase price and ownership cost. However, their market is limited to Japan and the automakers are forced to settle for small margins. This report refers to all small- to larger-sized vehicles other than the mini vehicles as the "non-mini vehicles."

Related Reports:  Japanese OEMs aim for record high sales in FY2013 (Jun. 2013)


Non-consolidated business performance and domestic production

 Nissan's non-consolidated results for FY2012 showed the first operating profit in five fiscal years. This reportedly is making it easier for Nissan to maintain production and employment including those of its suppliers in Japan, and spend more funds for research and development activities as well.

 Nissan plans to maintain annual production of 1 million vehicles in Japan. According to the company, the corrected appreciation of yen justifies the annual production quantity and Nissan may even restart purchasing from Japanese suppliers for certain parts.

 However, Nissan does not plan to restore production in Japan despite the correction of superstrong yen. Nissan will abide by the policy of "local production for local consumption" unaffected by the fluctuation in foreign exchange to increase the level of business stability.

 In June 2013, Nissan announced plans to transfer production of the Nissan Rogue (142,000 units sold in the U.S. in 2012) from Kyushu to Smyrna Plant in the U.S. at the time of switchover to an all-new model in the fall of 2013. Nissan plans to produce 85% of the U.S.-bound vehicles in North America including Mexico in 2015 (compared to 67.3% in 2012). Other than the transfer to the Smyrna Plant in the U.S., Nissan will have the Rogue produced by Renault Samsung in Korea with an annual quantity of 80,000 units.

Nissan's non-consolidated results

(Million Yen)
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Forecast
Net sales 3,923,280 3,053,312 2,899,166 3,432,989 3,734,336 3,526,252
Operating income 148,423 (229,935) (92,724) (36,957) (57,752) 85,360
Net income 219,855 (7,385) 262,403 (24,018) (74,826) 74,826
Production (1,000units) 1,263 1,050 1,025 1,073 1,199 1,060 1,010
Unit sales (1,000units) 721 612 630 600 655 647 660
Exports (1,000 units) 725 624 522 681 741 608

Source: Nissan's Financial results for FY2012
(Note) Red figures in parentheses represent operating deficits and net losses.

 

 



Establishing mutual parts supply network in Japan, Korea and China

 In October 2011, Nissan's Kyushu Plant was spun off from Nissan and started operation under the new corporate name of Nissan Motor Kyushu Co., Ltd. The plant began production of the all-new Note in 2012. The Serena minivan is selling well and the plant produced 561,000 units in FY2012. Nissan produced a total of 667,000 vehicles in FY2012 (62.9% of Nissan's total domestic production, 1,060,000 units) at two plants located in Kyushu, including 106,000 units (the NV350 Caravan, the Infiniti QX56, etc.) at Nissan Shatai's Kyushu Plant.

 Nissan plans to establish a mutual supply network for automotive parts connecting two plants in Kyushu, Renault Samsung's Busan Plant in Korea and Dalian Plant in China, toward the goal of maintaining high quality at low costs.

Establishing a mutual parts supply network connecting Kyushu, Busan and Dalian

Producing the all-new Note at Kyushu Plant  Nissan began production of the all-new Note at its Kyushu Plant in the summer of 2012. With the intention to keep the compact car production in Japan, production was relocated from Oppama to Kyushu Plant and achieved the "local procurement ratio" (ratio of procurement from suppliers in Kyushu-Chugoku district in Japan and overseas near Kyushu area) of 85% (the average ratio of other vehicle models produced at Kyushu Plant is 71%). Parts procured from overseas suppliers represent 40 to 45% of the 85%.
 Nissan plans to increase the local procurement ratio to 95% starting with the all-new models launched in 2013, and ultimately to achieve the ratio next to 100% after several years (other than the powertrain parts). In consideration of the fluctuation in foreign exchange, Nissan thinks "half and half" is the best ratio between domestic and overseas procurement.
Producing the Rogue at Renault Samsung Plant in Korea  Starting with the next model, the Nissan Rogue will be produced at Renault Samsung's Busan Plant in Korea in quantities up to 80,000 units a year. This will help boost the uptime ratio of the plant that is suffering from sluggish sales. All quantities will be exported to North America taking Korea's advantages of FTA agreement with the United States (the 2.5% tariff on passenger cars exported from Korea to the U.S. will be removed in 2016). Renault-Nissan plans to invest 160 million U.S. dollars for the consignment production.
 The Korean suppliers' quality has become high. Nissan is coaching parts suppliers located near Busan Plant to increase its local procurement ratio in Korea. Nissan plans to use their parts at Kyushu Plant in Japan and also at Dalian Plant in China which is slated for production starting in 2014. Nissan will strengthen and foster Renault Samsung as the export base of assembled vehicles and parts.
30 parts suppliers to start production  in Dalian  More than 30 suppliers are planning to start production near Nissan's Dalian Plant that will start production in 2014.
 The plant is situated by the Port of Dalian. Ocean transportation is far more advantageous than land transportation in terms of transportation costs. The port is expected to play a key role for transportation of assembled vehicles from Dalian to other parts of China and also for mutual supply of parts between China and Japan and Korea.
Establishing a distribution network connecting Japan, Korea and China
Cross-border operation of trailer trucks in Japan and Korea  An agreement was reached in August 2012 between Japanese and Korean governments allowing trailers to wear two number plates registered in the two countries and operate on public roads in either country. The registered trucks can skip unloading and reloading of containers at the destination port. This leads to major reduction of costs in terms of packaging and transporting time.
 Cross-border trailer operation started in October 2012 between Nissan's Kyushu Plant and Renault Samsung's Busan Plant. Commercial vehicle parts and general-purpose parts are exported from Korea to Japan while highly-functional parts for passenger cars are exported from Japan to Korea. The two companies have plans to add Dalian Plant in China in the distribution network in the future. The Dalian plant will start production in 2014.

(Note) In 2012, Daihatsu started a logistics operation of bringing Chinese-made parts from the port of Shanghai to its Oita Plant by a container ship.

 

Moves at Oppama and Tochigi Plants

Oppama Plant Reverse KD production of the Sylphy  In December 2012, Nissan launched the all-new Sylphy in Japan, equipped with an 1800cc engine and CVT with an auxiliary gearbox, having a larger body size than the preceding model. The new Sylphy is assembled at Oppama Plant by a "reverse knock-down" method with 60% of the parts imported from China and Thailand. The monthly sales target is set at 600 units.
 In July 2012, Nissan closed one of two production lines at Oppama Plant reducing Nissan's domestic production capacity from 1.35 million to 1.15 million units. The plant ended production of the Tiida, Tiida Latio and Note. The Tiida and Note were integrated as the new Note which is now produced at Nissan's Kyushu Plant. The Tiida Latio is now imported from Thailand as fully-assembled vehicles and was released for sale in Japan in October 2012. Nissan plans to improve the efficiency of its domestic production and maintain the annual quantity level at 1 million vehicles.

(Note) The all-new Sylphy has been sold under the model name of the Sylphy in China since July 2012, the Pulsar Sedan in Thailand since August 2012, and the all-new Sentra in the United States since October 2012. Nissan plans to sell a total of 500,000 units a year in the world.

Tochigi Plant Production of the Infiniti Q50  In May 2013, Nisan started production of the Infiniti Q50, the successor to the Infiniti G (dubbed Skyline in Japan), at the Tochigi Plant. The new model is being released for sale in the U.S. in the summer of 2013 and later to be launched globally. The company plans to produce 100,000 units a year.
 Nissan plans to nearly triple global production of the Infiniti from the quantity in FY2012 to 500,000 units by FY2016. In December 2012, Nissan started production of the Infiniti QX60 (successor to Infiniti JX) at the Smyrna Plant in the U.S. The company plans to produce other Infiniti models in the U.K. and China in the future. The increased production will be allocated for sales in overseas markets outside Japan, not for transferring current production from Japan. According to Nissan, the Tochigi Plant will remain the "mother plant" of the Infiniti-brand vehicles in the world.
(Notes) 1-1. According to Nissan, the vehicles produced at Tochigi Plant for exports were only creating deficits during the past two years due to the ultra-high appreciation of yen, and the profitability was regained after cost reduction efforts and the correction of yen's appreciation.
1-2. It has been reported that Nissan considers selling the Infiniti-brand models in Japan.
2-1. As part of the global procurement strategy, Nissan is following a unique way of sourcing to reduce the cost of parts procurement including the distribution cost (total delivered cost), especially for  front-end modules and other bulky components that require high distribution cost. Nissan has three procurement methods; "near site" sourcing refers to procuring from the suppliers located near the vehicle production plant. "In site" sourcing refers to inviting suppliers to the supplier park. With "on site" sourcing, suppliers are provided with necessary space within the vehicle production plant premise. This style of procurement is expected to reduce the total delivered cost by 5% a year (it is reported that the goal has been raised to 6% starting in FY2013).
2-2. After the completed vehicle production was transferred to other plants, Nissan is using the idling space in Oppama and Tochigi Plants for the "on site" production of parts including door trims. Calsonic Kansei has started "on site" production of cockpit modules and front-end modules at Nissan's Tochigi Plant. The seats for the Infiniti Q50 are also being manufactured "on site" at the Tochigi Plant by a seat manufacturer.

 

 



Enhancing all-new mini-vehicles and hybrid vehicles to expand domestic sales

 Nissan's domestic sales share fell from 13.8% in FY2011 to 12.4% in FY2012. The decline is attributed to the lack of product supply in the expanding mini-vehicle market as Nissan was not manufacturing mini-vehicles and had to rely on OEM supply. Another reason was that Nissan did not offer hybrid vehicles that represent 30% of all non-mini vehicles today (the Serena HV is a simplified hybrid vehicle).

Nissan's vehicle sales and market share in Japan

FY2009 FY2010 FY2011 FY2012
Non-mini 493,839 458,718 503,214 495,880
Mini 136,231 141,484 152,150 151,057
Nissan total 630,070 600,202 655,364 646,937
Market share 12.9% 13.0% 13.8% 12.4%
Total demand 4,880,174 4,601,059 4,753,232 5,210,232
Source: Nissan's "Production, sales, export" reports. Total demand figures are taken from Japan Automobile Dealers Association (JADA) statistics (total sales including trucks and buses).
(Note) Nissan aspires to be the second largest automaker in terms of domestic sales.

 

 



Launching the DAYZ, the first mini-vehicle co-developed with Mitsubishi Motors

 Mini-vehicles are gaining people's support rapidly and they represent as much as 37.9% of the automobile market in Japan in FY2012. Nissan is launching the first all-new mini-vehicle jointly developed with Mitsubishi Motors with the hope of increasing the two companies' combined share to 20% in Japan's mini-vehicle market in a medium-term perspective. (Related Report)

Unit sales and composition ratios of non-mini vehicles and mini-vehicles

Unit sales in Japanese market Ratio
FY2009 FY2010 FY2011 FY2012 FY2009 FY2010 FY2011 FY2012
Non-mini 3,182,073 2,972,348 3,064,336 3,237,690 65.2% 64.6% 64.5% 62.1%
Mini 1,698,101 1,628,711 1,688,896 1,972,542 34.8% 35.4% 35.5% 37.9%
Total 4,880,174 4,601,059 4,753,232 5,210,232 100.0% 100.0% 100.0% 100.0%
Nissan/Mitsubishi's unit sales and shares in mini-vehicle markets
Unit sales Market share
FY2009 FY2010 FY2011 FY2012 FY2009 FY2010 FY2011 FY2012
Nissan
Mitsubishi
136,225
105,449
141,486
104,179
152,149
90,891
151,060
72,604
8.0%
6.2%
8.7%
6.4%
9.0%
5.4%
7.7%
3.7%
Total 241,674 245,665 243,040 223,664 14.2% 15.1% 14.4% 11.3%
Total demand 1,698,101 1,628,711 1,688,896 1,972,542 100.0% 100.0% 100.0% 100.0%

Source: Japan Automobile Dealers Association, Japan Light Motor vehicle and Motorcycle Association


 In June 2013, Nissan launched a "height wagon" type mini-vehicle dubbed the DAYZ, the first mini-vehicle co-developed with Mitsubishi Motors. Nissan and Mitsubishi plan to sell 150,000 units in total in FY2013 including 100,000 units under the model name of Nissan DAYZ and 50,000 units under the twin model name of Mitsubishi eK Wagon. The second model of the co-development project, the "Super-height wagon" type DAYZ ROOX mini-vehicle, is slated for market launch in early 2014.

 When Nissan entered the mini-vehicle market in 2002, the company considered mini-vehicles as a model to keep the loyal users of Nissan vehicles from switching to other brands' mini-vehicles. Today, Nissan has placed  mini-vehicles as one of its important strategic segments.

 Nissan projects that the mini-vehicle sales will increase from 23% of its total domestic sales in FY2012 to nearly 40% in FY2016.

 

Nissan DAYZ, the first mini-vehicle co-developed by Mitsubishi, launched in June 2013

Launch models Description
"Height wagon" type the DAYZ  In June 2013, Nissan and Mitsubishi Motors launched the new mini-vehicles dubbed Nissan DAYZ and Mitsubishi eK Wagon, developed by NMKV Co., Ltd., a fifty-fifty joint venture formed by the two companies. Both models are manufactured at Mitsubishi's Mizushima Plant. They are the first mini-vehicles that Nissan was involved from the planning stage and Nissan is content that they are the very mini-vehicles that Nissan had wanted to develop.
 Equipped with the newly-developed 3-cylinder engine and a CVT with an auxiliary gearbox, the mini-vehicle is fitted with a start-stop system that stops the engine when the vehicle speed drops to 13km/h or slower. This system has achieved the best JC08 fuel efficiency for mini-vehicles at 29.2km/liter, defeating that of Suzuki's height wagon type the WagonR (28.8km/liter) and the Daihatsu Move (29.0km/liter).
 The body is made of super-high-tensile steel by 4% and  high-tensile steel by 52%. The body structure is optimized to reduce the overall weight while ensuring safety. The DAYZ is also the first mini-vehicle fitted with the "around-view monitor" and "touch-panel auto air conditioning" features.
"Super-height wagon" type the DAYZ ROOX  In early 2014, Nissan and Mitsubishi are launching the second model of their joint development, the Nissan DAYZ ROOX and a Mitsubishi-brand model (successor to the Mitsubishi Toppo, model name to be announced later). Nissan had been receiving OEM supply of Suzuki Palette of the same class but ended this arrangement when the Palette was redesigned and launched under the new model name of Spacia in March 2013. In addition to the Suzuki Spacia, the Daihatsu Tanto and the Honda N BOX will compete with the DAYZ ROOX.
Off-road type  Nissan and Mitsubishi are jointly developing the new model to be launched in 2014, as a successor to Mitsubishi's off-road type Pajero Mini whose production ended in June 2012.  Nissan used to receive OEM supply of the Pajero Mini and sell the same model under the name of the KIX.
(Notes) 1-1. Nissan is shrinking its OEM supply arrangement for mini-cars from Suzuki. In FY2012, Nissan sold 46,524 units of the Nissan ROOX (Suzuki Palette) and 67,513 units of the Nissan Moco (Suzuki MR Wagon), totaling 114,037 mini-vehicles. The Suzuki-made mini-vehicles accounted for 75.5% of Nissan's mini-car sales during the year.
1-2. As for the commercial mini vehicles, Nissan is taking supplies of the Minicab from Mitsubishi and selling them under the model name of the Nissan Clipper. To maintain the mutual supply relations with Suzuki that Nissan has OEM supply arrangement with for the Serena Minivan (dubbed Landy by Suzuki), Nissan plans to end the commercial mini vehicle procurement arrangement with Mitsubishi and switch to procure Suzuki's Every Mini Van and Carry Mini Truck.
2. Nissan and Mitsubishi have started developing automatic brakes that may be fitted in mini-vehicles. Brakes have a major cost impact on mini-vehicles and cost balance is a critical issue. The Daihatsu Move and its OEM supply model, Subaru Stella, are the only mini-vehicles with the automatic brakes feature today (for additional cost of 50,000 yen).

 

Developing vehicles based on the new mini-vehicles eyeing global launch

 At the time of launch of the DAYZ and the all-new eK Wagon, Nissan and Mitsubishi expressed the possibility of selling vehicles based on those mini-vehicles in overseas markets. The two companies are considering launching the new cars as the entry models in emerging markets including Africa.

 

 



Launching 15 new hybrid models by the end of FY2016

 The ratio of hybrid vehicles in all non-mini vehicles registered in Japan rose sharply from 19% in 2011 to 29.7% in 2012.

 In December 2012, Nissan announced plans to launch 15 additional hybrid vehicles by the end of FY2016 as part of its environmental strategy.

Unit sales and composition ratios of hybrid vehicles in the passenger car market in Japan

Unit sales Ratio
2009 2010 2011 2012 2009 2010 2011 2012
Hybrid vehicles 347,729 480,637 453,263 896,756 13.2% 16.4% 19.0% 29.7%
Non-mini passenger cars 2,640,312 2,927,602 2,386,036 3,014,651 100.0% 100.0% 100.0% 100.0%
Source: Japan Automobile Dealers Association
(Notes) 1. The figures include the "smart simple hybrid" model of the Nissan Serena and its OEM supply model, Suzuki Landy.
2. Nissan's domestic sales of the Leaf EV were 10,310 units in 2011 and 11,115 units in 2012.

 

Launching 15 new hybrid vehicles by the end of FY2016

 In December 2012, Nissan announced plans to launch 15 additional hybrid vehicles by the end of FY2016. The HV plan includes pickup trucks and SUVs as well as the passenger cars, covering Nissan's entire product lineup. Nissan is said to have plans to launch PHVs as well and be also considering a hybrid only model.
 Today, Nissan sells two types of hybrid vehicles, the rear-wheel drive one-motor/two-clutch hybrid system as on the Cima and Fuga, and the smart-simple hybrid system as on the Serena. Nissan is launching the Nissan Pathfinder/Infiniti QX60, fitted with the front-wheel drive one-motor/two-clutch hybrid system, in the United States in the summer of 2013. Nissan plans to use these three hybrid systems selectively for different vehicle sizes and intended characteristics (the front-wheel drive one-motor/two-clutch hybrid system is likely to be fitted on mid-sized and larger vehicles).
 According to Nissan, the auto industry has reached limits in improving internal combustion engines to meet the fuel efficiency requirements that grow increasingly stringent around the world. In Nissan's view, hybridization is an inevitable trend and some sort of electrification will be introduced in every vehicle by 2020 or thereabout.

(Note) The Nissan Leaf EV sold 62,000 units in total by the end of May 2012. Nissan used to consider hybrid as a "transition" technology to pave the way to electric vehicles. It is reported that Nissan has shifted its policy in favor of hybrid technology as well because of the recent market trends.

 

 



Global unit sales: Projecting 8% increase to 5.3 million units in FY2013

 Nissan's global retail in FY2012 increased 69,000 units (1.4%) from FY2011 to 4,914,000 units marking an all-time high for four consecutive years. However, it fell 436,000 units short of the annual target of 5,350,000 units.

 The sluggish retail is attributed to the tough competition in the United States and China that collectively account for nearly half of Nissan's global sales (47.7% in the initial plan for FY2012). The total demand in the U.S. market increased by 11.6% but Nissan's sales increased only by 5.4%.

 Nissan foresees a general sales increase in all markets in FY2013 and projects its sales to increase 386,000 units (7.9%) to 5.30 million units in the world.

Nissan's global retail quantities

(Thousand units)
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Plan
Plan
(Note)
Results Difference
Japan 612 630 600 655 690 647 43 660
North America (including Mexico)
thereof: US
1,133
856
1,067
824
1,245
966
1,404
1,080
1,520
1,200
1,466
1,138
54
62
1,610
1,270
Europe 530 509 607 713 720 660 60 720
Asia 1,136
(China
545)
962 1,311 1,591 2,420
(China
1350)
2、141
(China
1,182)
279
(China
168)
2,310
(China
1,250)
thereof: China 756 1,024 1,247
Others 347 422 482
Total 3,411 3,515 4,185 4,845 5,350 4,914 436 5,300
Source: Nissan's Consolidated Financial Results for FY 2012
(Notes) 1. Figures in blue indicate quantities for the U.S. included in the total of North America, and for China included in the total of Asia.
2. The plans for FY2012 are those included in Nissan's financial statements for FY2011 announced in May 2012. In November, Nissan corrected the global sales projection downward to 5.08 million units (including 1.175 million units in China).

 

 



Consolidated financial results for FY2012 and outlook for FY2013

 Nissan's consolidated net revenues for FY2012 increased 2.3% to JPY 9,629.6 billion. The company's operating profit declined by 1.1%, for the first time in four fiscal years, to JPY 523.5 billion due to change in model mix, increased selling expense, etc. The decline, despite the record-high global sales, is chiefly attributed to tough competition in the United States and China that account for nearly 50% of Nissan's total sales. China in particular is a large market for Nissan accounting for as high as 25.7% in its global sales in FY2011, and had a major impact on the company's financial performance.

 Nissan' Chinese business used to be included by pro-rata consolidation in Nissan's financial results up to FY2012 for 50% of revenues and operating profit based on its controlling share. Starting with FY2013, Nissan will change its reporting standards after which Nissan will shift to the equity method accounting procedure for the joint venture between Nissan and the Chinese company. This means Nissan's income statements will no longer include the Chinese company's results in revenues and operating profit (the net income reporting will remain unchanged).

 Based on the new reporting standards, Nissan forecasts its net sales for FY2013 to be JPY 10.37 trillion (up 7.7% year on year). Its consolidated net sales, if calculated following the former standards, are forecast to mark the all-time high at JPY 11.20 trillion (up 16.3%).

 The correction of yen's appreciation has a positive impact that translates to JPY 30.2 billion in FY2012 and the amount is expected to increase to JPY 225 billion in FY2013.

Nissan's consolidated performance

(Million Yen)
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Forecast
New
standards
Former
standards
Net sales 8,436,974 7,517,277 8,773,093 9,409,026 9,629,574 10,370,000 11,200,000
Operating income (137,921) 311,609 537,467 545,839 523,544 610,000 700,000
Ordinary income (172,740) 207,747 537,814 535,090 529,320 645,000 665,000
Net income (233,709) 42,390 319,221 341,433 342,446 420,000 420,000
Capital expenditure 383,600 273,600 312,000 406,400 524,500 520,000 570,000
R&D costs 455,500 385,500 399,300 428,000 469,900 508,000 520,000
FOREX (USD) JPY 100.7 JPY 92.9 JPY 85.7 JPY 79.1 JPY 82.9 JPY 95.0
FOREX (EUR) JPY 144.1 JPY131.2 JPY113.1 JPY 109.0 JPY 106.8 JPY 122
(Notes) 1. Nissan has changed the accounting standards from FY2013 onward regarding its Chinese business. Up until FY2012, Nissan had 50% of revenue and operating profit at Dongfeng Motor Co., in China included in its financial results in a pro-rata consolidation method. Nissan is shifting to the equity method accounting standard from FY2013 onward. Nissan's consolidated net sales and operating profit will no longer include Dongfeng's results although the net income reporting will remain unchanged.
2. It is said that the operating profit on sales in Chinese business among leading automakers generally exceeds their world average. In the case of Nissan, it accounts for about one fourth of the operating profit in FY2011. As a result of the shift to the equity method accounting procedure, Nissan forecasts the operating profit on sales in FY2013 will decrease by JPY 90 billion than the figure calculated by  the former standard.
3. For the same reasons, Nissan forecasts a decline in its financial results in FY2013 by JPY 830 billion in the consolidated net sales, JPY 50 billion in capital expenditure, and JPY 12 billion in R&D costs, respectively, compared to the former pro-rata consolidation method.
Factors of increase in consolidated operating profits
(Billion Yen)
Results in previous fiscal year Foreign exchange impact Reduced purchasing cost
(incl. raw material)
Volume, model mix Selling expenses Other expenses Operating profit
Results in FY2012 545.8 30.2 190.4 (57.2) (53.3) (132.2) 523.5
Forecast for FY2013 523.5 225.0 160.0 80.0 (205.0) (83.5) 700.0

Source: Nissan's financial Results for FY2012
(Note) The forecast for FY2013 is based on the old accounting method that includes results of the Chinese joint-venture company by pro-rata consolidation.

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