The annual forecast for profit was cut by Nissan officials by 20%. Nissan said sales in China have been plummeting following the territorial dispute between the second largest economy in the world and Japan. The automaker, based in Yokohama, Japan joined both Toyota and Honda in suffering from falling demand because of a boycott by consumers over two islands called Diaoyu and Senkaku.
The full year profit forecast for Nissan was cut by one fifth to $4 billion, which reflects on its dependence in just one market for close to 25% of its sales. October sales numbers revealed the scale of the problem due to the boycott.
Sales in October showed 64,300 vehicles had been sold, which was a drop of over 41% from the same month one year ago. Honda and Toyota also reported sales slumps in China of 41% and 49% respectively during September.
Nissan, along with cutting its profit forecast for a full year also trimmed its sales forecast for the year, as it estimated that China sales would be 1.175 million vehicles during 2012 or 175,000 less than previously thought.
Nissan predicted sales globally to be 5.08 million vehicles through March 2013, which is down from the original prediction of 5.35 million. However, Nissan said some signs of revival were taking place in China, which is now the largest car market in the world surpassing the United States.
BMW in Germany said that the increasing demand in China for luxury autos, which is also a boon for carmakers in the UK, had helped to offset the weak performance in Europe during the third quarter between July and September.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.