Nissan slashes profit amid Ghosn scandal, lagging sales

Associated Press

TOKYO

Nissan cut its profit forecast for the fiscal year through March on Wednesday to reflect slowing sales, higher costs and the fallout from a criminal investigation of its former chairman, Carlos Ghosn.

Nissan Motor Co. expects to post a $2.9 billion profit for the fiscal year, marking a 22 percent drop from its earlier $3.7 billion forecast.

Nissan said the downgrade reflects higher costs in the U.S. from a warranty extension campaign for some vehicles and falling sales due to “corporate issues,” alluding to the Ghosn scandal.

Ghosn was arrested in November and is facing charges of underreporting his income and breach of trust. He says he is innocent. He was released on bail in March, and was re-arrested April 4. Late Wednesday, a Japanese court approved his release on $4.5 million bail.

Nissan, which is allied with Renault SA of France, has seen sales lag in France and Japan, where Ghosn is widely known. In the U.S. and China, buyers aren’t as affected by the scandal, but the markets there overall have slowed.

Other factors contributed to the revision, such as production not keeping up with demand for the Note, an extremely popular model in Japan.