YOKOHAMA (Kyodo) -- Nissan Motor Co. said Thursday it will stick to its basic policy of promoting local production regardless of what trade policy the United States will take to mitigate the impact of uncertain changes in the business climate.
"We think increasing local production is an effective measure in any case" to address trade or foreign currency issues, Corporate Vice President Joji Tagawa told a press conference on its earnings.
The outlook for Nissan and other Japanese carmakers is threatened by U.S. President Donald Trump's trade policy. The president has threatened to slap additional tariffs of up to 25 percent on imported cars and parts, a move Tagawa described as affecting automakers "enormously."
Japan's second-biggest carmaker by volume said its group net profit fell 14.1 percent to 115.83 billion yen ($1.04 billion) in the three months ended June 30 due largely to weak global vehicle sales and higher material costs.
Group operating profit dropped 28.8 percent to 109.14 billion yen in the April-June quarter as group sales declined 1.6 percent to 2.72 trillion yen.
"The results were tough (to accept). The impact of (weak) sales in the United States and Europe was big," Tagawa said.
Global sales fell 3.0 percent to 1.31 million vehicles in the first fiscal quarter, as U.S. sales dropped 9.5 percent to 365,000 vehicles and sales in Europe fell 12.7 percent to 162,000 vehicles.
Tagawa said material costs could rise further if the recent hike in U.S. tariffs on aluminum and steel products has a bigger impact on commodity prices going ahead.
General Motors Co. and Ford Motor Co. recently lowered their profit outlooks, citing higher costs stemming from the hike in the tariffs. Nissan felt only a small impact from the tariffs in the quarter, Tagawa said.
For the business year through March, Nissan left unchanged its group net profit forecast at 500 billion yen, down 33.1 percent from the previous year. It also maintained its operating profit outlook of 540 billion yen, down 6.0 percent and its sales projection of 12 trillion yen, up 0.4 percent.