October 16, 2003

Nissan announces 15.2% increase in first-half
operating profit to 401.1 billion yen

Tokyo (October 16) - Nissan Motor Company announced today that it expects to report an 11.3% operating profit margin for the first half of fiscal year 2003 and a 15.2% increase in operating profits, to 401.1 billion yen (US $3.40 billion, euro 3.05 billion). At the midpoint of NISSAN 180, Nissan's three-year business plan, record operating profits are attributed to a combination of higher volumes from new products and lower costs.  The company will file its official audited report on November 6, 2003.

 "We have been faced with adversities on many fronts - from lower industry volumes and record levels of incentives to fluctuating exchange rates and uncertainty in global markets.  Even so, Nissan is again reporting record operating profits,"  said President and CEO Carlos Ghosn.   "We remain very focused. We will systematically pursue our NISSAN 180 drive to establish lasting, profitable growth." 

Ghosn also mentioned that two previously announced investment decisions started operations in the first half of fiscal year 2003.  The company's automobile manufacturing plant in Canton, Mississippi, produced its first model in May, just 25 months after ground was broken to construct the facility.  In July, Dongfeng Motor Co., Ltd. - Nissan's 50-50 joint venture with Dong Feng - started operations as the first Sino-foreign full-line automobile joint venture in China with product lines ranging from passenger cars to light commercial vehicles, buses and trucks.

On expected revenues of 3.56 trillion yen (US $30.14 billion, euro 27.09 billion) for the first half of the 2003 fiscal year, Nissan's operating income is expected to be 401.1 billion yen (US $3.40 billion, euro 3.05 billion), a 15.2% increase over the first half of fiscal year 2002.  The operating margin is projected to be 11.3% of net sales, driven by volume growth and cost reductions.  Net income after tax is expected to be 237.7 billion yen (US $2.01 billion, euro 1.81 billion), lower than last year's level of 287.7 billion yen.  Factors affecting net income include the payment of higher current taxes as the company returns to normal taxation in Japan and the one-time gain from the sale of the Murayama Plant in the first half of fiscal year 2002.

The impact of foreign currency exchange on first-half results was negligible as the negative impact from a weaker dollar was offset by more favorable rates for other currencies, particularly the euro and the pound.

Nissan also reported that the company is on track to achieve its annual return on invested capital target of at least 20%.

Globally, Nissan retail sales totaled 1,467,000 units in the first half of the fiscal year, an increase of 5.9% from the same half-year period of fiscal year 2002. Sales performance is being sustained by Nissan's product plan, which will introduce 28 all-new products during NISSAN 180.  Ten of those products are being launched in the current fiscal year; to date, eight new products have been launched globally.

In Japan, Nissan's sales volume rose 0.9% to 387,000 units (including mini-cars) in the first half.  In the United States, volume was up 11% to 420,000 units.  In Europe, sales increased 6.6% to 267,000 units from January to June. General overseas markets saw a 5.3% increase to 393,000 unit sales.  In China, volume is up 33% to 48,000 unit sales.

Financial forecast:

Recognizing recent trends in foreign exchange markets, Nissan is changing its assumption for the second half of the fiscal year to adjust the yen/dollar rate from 120 yen per dollar to 110 yen per dollar while the yen/euro assumption will remain at 125 yen per euro.

The company filed an unchanged financial forecast for the full year with the Tokyo Stock Exchange.

Full-year revenues are expected to reach 7.45 trillion yen (US $63.08 billion, euro 56.70 billion) and operating profits to be 820 billion yen (US $6.94 billion, euro 6.24 billion).  The operating margin is projected to be 11%.  Ordinary profit is forecasted to be 781 billion yen (US $6.61 billion, euro 5.94 billion), and the net profit after tax is expected to be 495 billion yen (US $4.191 billion, euro 3.767 billion).

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Note: Amounts in dollar and euro are translated for the convenience of the reader only at the rate of 118.1 yen/dollar and 131.4 yen/euro, the average rate for the first half of fiscal year 2003.