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Monday, 19 November, 2001, 12:01 GMT
Nissan cutbacks produce record profits
Nissan chief executive Carlos Ghosn
Ghosn's 'revival plan' has led to record profits and 21,000 job losses
Profits at Japanese car giant Nissan have shot ahead thanks to a savage two-year cost-cutting programme and the beneficial effects of a weakened yen

The company, which is 37% owned by France's Renault, saw net profits for the six months to September soar 33.9% over the previous year to 160.3bn yen ($1.9bn; 1.3bn).

The figures mark the third successive half-year period of increasing profits.

It was "the best financial performance of the company in a decade", the company said.

Revived

The roots of the healthy results - at a time when global car sales appear to be slowing and manufacturers around the world are struggling amid the post-11 September slowdown - lie in the three-year "Nissan Revival Plan" launched in October 1999 by president Carlos Ghosn.

Mr Ghosn was parachuted into Nissan by Renault, to try to turn around what was then a failing company.

So far the plan - which still has a year to run - has cost 21,000 employees their jobs and involved the closure of five factories in Japan and ditching of 10 non-essential subsidiaries.

But it has kept Nissan's head above water. The company's performance has also assisted Renault, to the extent that the two companies will shortly deepen their cross-shareholding.

Exchange rate help

A weaker yen also contributed to Nissan's healthy showing.

Whereas last year the US dollar averaged 107 yen between April and September, it rose to 122 yen this year.

"In this fiscal half we saw 58bn yen added to our operating income due to a favourable foreign exchange movement," said Nissan vice president Kiyoto Shinohara.

And 101bn yen was saved in part purchases.

But sales overall have not matched profits, as Nissan has cut back on production.

Globally, Nissan sold 1.29 million vehicles in the period in question, down 3.8% from the 1.34 million sold in the same six months of last year.

See also:

30 Oct 01 | Business
Nissan and Renault cement ties
30 Oct 01 | Business
Volkswagen profits beat forecasts
01 Oct 01 | Business
Renault orders factory shut-downs
21 Jun 01 | Business
Ghosn tightens Nissan grip
17 May 01 | Business
Nissan returns to profit
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