Nissan has hit 'rock bottom' as profits slump, says car maker's boss

Nissan boss Hiroto Saikawa says the car maker has hit "rock bottom" as it reported a sharp fall in annual profits and continued to grapple with the fall-out from the arrest of former chairman Carlos Ghosn.

The Japanese company said operating profits slumped 45% to 318 billion yen (£2.2bn) for the year to the end of March and forecast a further decline of 28% for the current financial year.

It also booked 4.4 billion yen (£31m) of expenses to reflect previous misstatements involving Mr Ghosn's pay - an issue at the heart of allegations of financial misconduct against him, which he denies.

Mr Saikawa apologised for the results, telling a news conference in Yokohama: "Today we have hit rock bottom.

"We would like to recover to our original performance level in two to three years."

Nissan's outlook for the 2019-20 financial year puts it on course for the weakest performance in 11 years.

The biggest blow to its bottom line has come from costly sales incentives in the US, where its sales fell 9.3% to 1.44 million units over the latest year.

In the UK, the number of vehicles sold slumped by 26% to just over 110,000.

Overall vehicle sales were down 4% to 5.5 million vehicles.

Mr Saikawa said: "Most of the problems we are facing are the negative legacy of our old leader."

Nissan has for years relied on heavy discounting in its biggest market to sell its Rogue compact SUVs and Altima sedans, under aggressive sales targets.

Mr Saikawa, who took over as Nissan's chief executive in 2017, has pledged to focus on improving US profit margins.

The results follow the arrest of the carmaker's former chairman Mr Ghosn in November by Japanese authorities.

Mr Ghosn was subsequently ousted from his leadership positions at Nissan as well as Renault, with which it is in a global partnership.

He is on bail as he awaits trial over claims of under-reporting retirement compensation as well as diverting investment losses to Nissan, and diverting the company's money for personal gain.

Mr Ghosn, who is credited with turning around the company's fortunes over the last two decades, claims he is the victim of a boardroom coup.