By HIROKO TABUCHI, Associated Press Writer

TOKYO — Nissan is having a "performance crisis."

That's what the Japanese automaker's president, Carlos Ghosn, said on Friday after Nissan slashed its annual forecast and reported a 22 percent slump in earnings from October through December.

"We have today a performance crisis and we need to fix it as soon as possible," president and chief executive Ghosn told reporters in Tokyo in a conference call from Paris. "We don't take this lightly ... it's really an interrogation for us, about our management ways."

Japan's No. 3 automaker by global vehicle production, said net income fell to 104.5 billion yen ($870.8 million) in the fiscal third quarter, compared with 135 billion yen a year earlier.

The drop forced the Tokyo-based company to cut its profit forecast for the fiscal year through March by 12 percent to 460 billion ($3.83 billion). If realized, it would be Nissan's first annual profit decline in seven years.

Sales climbed a meager 1.8 percent from a year earlier to 2.34 trillion yen ($19.5 billion) on a 3 percent fall in unit sales to 795,000. The company also warned that it is falling behind its full-year sales target of 3.7 million vehicles.

The woes at Nissan, which is 44 percent owned by Renault SA of France, underlined the diverging fortunes of the automaker and its archrivals Toyota Motor Corp. and Honda Motor Co., which have both notched up record earnings while boosting market share in the United States and elsewhere.

It was also the first time that Ghosn _ who became a celebrity in Japan for his turnaround of an automaker that was once on the brink of bankruptcy _ has faced tough questions about the company's outlook.

Nissan recently ceded its spot as Japan's second-largest automaker to Honda, and has struggled to boost profits amid sagging sales. A lack of new models hurt U.S. sales and compounded wider problems such as tough competition and spiraling commodity costs.

In the first half of the fiscal year, Nissan launched just one of 10 new products scheduled for the market. It rushed out six more in the third quarter, but the company conceded the move came too late.

Unit sales in the United States, the company's most important market, inched up just 0.9 percent to 243,000 vehicles in the latest quarter, but were still down 6.9 percent in the first nine months. Sales in Japan and Europe, Nissan's next two biggest markets, were down both in the quarter and for the first nine months.

Still, Brazilian-born Frenchman Ghosn, who became the first foreigner to head a Japanese automaker when he took over Nissan's top job in 1999, said the company was bolstering its vehicle lineup and expected a quick return to profit growth.

"We are expecting 2007 to be better than 2006, in terms of growth, profit, and net income. The question is how much better," Ghosn said. "If Nissan is not capable of growing with this product pipeline, then the situation is really tragic. This we don't think."

He added that neither Nissan or French automaker Renault SA, of which Ghosn is also chief executive, would rush to form alliances with other automakers.

In a bid to strengthen their global market position, Nissan and Renault entered talks with Detroit-based General Motors Corp. about forming a three-way alliance last year. But the talks came undone after Nissan and Renault declined to pay a premium for reaping what GM said would have been a disproportionate share of the benefits.

"We are not going to deviate any of our attention or energy outside," Ghosn said. "We want to re-establish the growth in profit and sales for Nissan, and establish a good pattern of growth at Renault, before envisioning anything else."

For the first nine months combined, Nissan's net income rose 3.5 percent to 378.6 billion yen ($3.16 billion) from 365.7 billion yen a year earlier. Sales by value edged up 1.2 percent to 6.877 trillion yen ($57.3 billion).

Shares in Nissan, which have steadily gained ground since August, fell 1.8 percent to 1,509 yen ($12.57) Friday on the Tokyo Stock Exchange. The company released its results after the market closed.

___

Associated Press writer Hans Greimel contributed to this report.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The new Altimas look pretty bad a$$... We'll see if that gets the ball rolling.

 

shocker...Nissan puts out ugly cars that handle poorly, and customer service sucks. No surprise Honda is whooping Nissan....

btw, I can't speak for the high-end Altima models, but I saw the new 2.5 Alti today in person and it was ugly as hell....

 

most people could give a rat's *** at how a car handles though so that issue only affects a VERY small percentage of buyers.

and looks are subjective. I happen to think the new alti looks hot as hell...and I also believe that Nissan's SUV/truck line is VERY good. All of the publications that ride honda/toyota's sacks have more of an affect on buyers than performance. And in the past few years toyota has been about as reliable as nissan which were both substantially worse than honda.

 

agreed that Nissan is putting out ugly, renault influenced designs. They need fresh, sexy NOT different for the sake of being different designs.

Sad because engine wise, they are pretty good, interior wise, the designs are good but the execution is crap (ie poor materials). Cost cutting shows like one bad apple in a barrel. As for suspension, yep, crap. No clue why they can't develop a chassis/suspension that is stiff as hell and has ride/performance balance that rivals Honda and BMW.

I'll drive my 4th gen into the ground because I love it but after this, it's off to someplace else.

 

Drive an altima. interior quality is very good, the chassis is very stiff, it has a smooth ride, and the 6MT is better than most I've driven.

As for interior quality, I think they've made great strides in the past couple years. The '06 Z's interior is much improved as are the '07 maxima and altima interiors.

 

i coulnt have said it better myself..

 

I agree with Rowan on the fact Im running my 4th gen to the ground . Apart from the truck line, the cars are turning for the worse in design/ build quality (interior materials, creaks and rattles from the feather-soft chassis's).

Slightly OT, but this reminds me in a way of how General Motors made the mistake to kill off the all-mighty Impala SS in 96. As if that wasn't enough they brought back the name and slapped it on a Lumina FWD 6 cylinder caca replacement. No RWD with AT LEAST an LS1 no care

 

Go drive all of nissan's new models. The only cars I didn't like driving were the sentra and maxima, and I would get a civic any day before getting a sentra. The altima, versa, and 350z are excellent cars and so are all of their SUVs and Trucks. The frame/ride/handling on the new altima is so much better than any maxima has ever been and the interior quality has really increased.

I think many people are basing their opinions off of something they've heard from articles and not something they've experienced. I can say hands down the current altima is WAY better than the current accord and the versa is better than the fit, but do the magazines see it that way? No because they're biased. Put some stickier tires on the versa and it can easily handle as well as the fit with a much smoother and quiet ride. I love honda and their engines but magazines don't rate cars by how reliable they are, they rate them by performance, options, value, comfort, etc. and IMO the altima and versa are better as a total package.

Now the new civic kicks the **** out of the competiton, and I expect the new accord to do the same (whenever it is released). But honda's truck/SUV line are severly lagging. The new CRV doesn't even offer a V6 like the toyota rav4 and the ridgeline POS isn't even a truck. The Pilot is alright, but I would take a VQ40 (or even a new VK56) pathfinder before it. I'm not saying nissan is better than honda becuase as a company, they have horrible customer service, terrible marketing strategies, and they never seem to have the right model available at dealers but IMO the cars I listed and the SUV/truck lines are better...

 

Nissan had better smarten up fast with both their products & customer service or else........till then I will drive my 3rd Gen Max into the ground, 130K VG 3.0 runs better than new, I think she will be around for another 10 years, mabe Nissan will have their head out from their Buttocks by then!

 

My mom's VG30E quest is still running like new and it has over 200k now. Her maxima (2000 VQ30DE-k) that she just sold had 235k on the original tranny/engine/sensors, though and it was running nice as well. Looking at the construction of the new VQ35HR, it's very beefy much like the old VGs were, so hopefully we'll see some pretty reliable cars coming out from nissan.

Customer service is another issue. They need to TRAIN whoever they higher much more than they already do. Every time I go into nissan I know tons more than the retard service managers and I think that one of the roots of their problems is they don't know how to properly diagnose a car so they just say it can't be fixed, etc. and rip you a new one.

 

Yeah, and we all know how accurate and unbiased all those articles can be. Many of them are just rehash of press material. Sometimes I wonder if they even drive the cars before writing the articles.

 

outmaxxed-your sig is !!!!!! For me, it would either be another Honda, Toyota, BMW(only "reliable" german) or possibly another Nissan

 

that also goes for posts some people put on this thread. I personally think the new line of nissan cars are WAY BETTER LOOKING than any past nissans.

I agree with the interior, not as good as other car makers but yet, its not terrible.

If the next gen max doesnt look sporty enough, I may go with Infinity or Lexus.

 

again looks are subjective.

And if all you care about is for the car to be sporty "looking", which can be assumed by this statement:

Then you might not be disappointed with the next max, because I'm sure they'll make it sporty "looking". However, when it comes to driving experience I doubt there will be anything "sporty" about it...It's moved more upscale now and has finally given nissan a reason to call it their 'flagship' car. Yes it'll be powerful just like all the other luxo boats out there but it won't be fun to drive anymore...

 

Fun to drive.... can be subjective also.

if you are referring to the CVT vs. manual..... you have a point!
But if the next gen of max comes in couple of years, the CVT may prove better...

But who knows... it may suck or it may kick assphalt!!!

 

'Fun to drive' has a lot more to do than just the transmission/acceleration.