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Nissan's quarterly profit rises nearly 5 per cent as sales outpace industry, weak yen helps

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TOKYO - Nissan's quarterly profit edged up nearly 5 per cent as sales grew around the world and a favourable exchange rate helped earnings.

Nissan Motor Co. reported Monday that January-March profit totalled 114.9 billion yen ($1.1 billion), up from 109.7 billion yen the year before. Quarterly sales rose more than 20 per cent to 3.2 trillion yen ($31 billion).

Nissan said its sales growth was outpacing the industry. The Japanese automaker is expecting continued growth for the current fiscal year that began April 1, according to CEO Carlos Ghosn.

Yokohama-based Nissan forecast annual net profit of 405 billion yen ($4 billion), up 4 per cent from 389 billion yen ($3.8 billion) in the last fiscal year.

Both its quarterly and annual profit results were better than Nissan's own forecasts and the projections by analysts surveyed by FactSet.

A weak yen has been a boon for Japanese exporters such as Nissan, which makes the March subcompact, Infiniti luxury models and the Leaf electric car, and is allied with Renault SA of France.

But the perk is not expected to continue. Although the dollar soared to about 100 yen during the past fiscal year from about 80 yen the fiscal year before that, it's unlikely to keep rising at that pace, to 120 yen, for instance.

And that's weighing on the prospects of all the Japanese automakers, including Nissan, Japan's No. 2 automaker, because profits are unlikely to keep growing at the current pace.

Toyota Motor Corp., the world's top automaker, chalked up a record annual profit and sales above 10 million vehicles for the first time, but is forecasting a slower year as the momentum from a weak yen fades. It's forecasting a 1.78 trillion yen ($17.5 billion) profit for the fiscal year through March 2015, down from 1.82 trillion yen ($17.9 billion) the previous year.

Honda Motor Co., which sold 4.3 million vehicles for the fiscal year ended March 2014, is forecasting a 4 per cent rise in annual profit for the fiscal year through March 2015 to 595 billion yen ($5.8 billion).

Nissan sold 5.2 million vehicles around the world in the fiscal year ended March, controlling about 6.2 per cent of global auto market. It expects to sell 5.65 million vehicles during the fiscal year through March 2015, which would raise its global market share to 6.7 per cent.

Ghosn said the results announced Monday, although "satisfactory," still fall short of Nissan's potential because of its manufacturing capacity, management and competitive standing.

"This means pursuing profitable growth opportunities, focusing relentlessly on quality and enhancing our sales power," he said.

Nissan's sales were better than the industry growth rate in almost all markets. Nissan sales were especially strong in China, where its sales increased 17 per cent to 1.27 million vehicles for the fiscal year through March 2014. Its sales grew 13 per cent in the U.S. to 1.29 million vehicles.

In Japan, where overall sales grew by 9 per cent as consumers tried to beat a sales tax rise kicking in April 1, Nissan's sales rose 11 per cent to 719,000 vehicles.

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Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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