Nissan's 3-month profit up 36% on sales in US, China

Nissan on Wednesday said its three-month net profit jumped 36.3 percent to $1.3 billion on strong sales in North America, Europe and China, but observers warned that overall Chinese demand may be weakening.

The benefit of a sharply weaker yen also drove up the firm's performance, said Carlos Ghosn, president and chief executive officer.

"Nissan delivered solid financial results in the first three months of the fiscal year due primarily to strong demand for our core products in North America and Europe," he said in a statement.

Japan's number-two automaker said its quarterly net profit reached 152.8 billion yen ($1.3 billion), while operating profit jumped 58.0 percent to 193.7 billion yen.

Sales were up 17.6 percent to 2.90 trillion yen in the period.

The firm left unchanged its annual forecasts for a net profit of 485.0 billion yen, operating profit of 675.0 billion yen and sales of 12.10 trillion yen.

Japanese automakers have benefited significantly from the healthy growth seen in the US market with low interest rates, while the weaker yen has made them relatively more competitive overseas and inflated the value of repatriated overseas profits.

Sales slowed in their home market, however, after a sales tax rise last year dented consumer spending and as younger urban residents delayed buying a vehicle.

Unit sales in Japan fell 10 percent in the quarter, while European sales rose 10.7 percent and North American sales rose 8.9 percent.

Unit sales in China, the world's biggest vehicle market, jumped 11.3 percent, but Nissan has been trailing growth seen by rivals Toyota and Honda.

Nissan depends heavily on its sales in China.

"Nissan is fairly resilient in China and it says it still is on target to make its target," said Hans Greimel, Asia editor of the Automotive News.

"But the wild card will be China demand, which seems to be quickly deflating."

Nissan said it was preparing to launch new models, including the Titan pick-up truck in the US and the Lannia sedan in China, later this fiscal year to maintain the momentum.

The company expects to sell 5.55 million units globally this fiscal year, up 4.4 percent.

Takaki Nakanishi, auto analyst at Nakanishi Research Institute in Tokyo, said a weak yen was benefiting the Japanese auto sector as a whole.

"Nissan is enjoying growing sales in North America while the weak yen helped boost its exports," he said.