Nissan reports taking stake in Mitsubishi, drop in profit

Nissan Motor Co. President and CEO Carlos Ghosn, left, and Mitsubishi Motors Corp. Chairman and CEO Osamu Masuko shake hands after their joint press conference at the Nissan headquarters in Yokohama, near Tokyo, Thursday, May 12, 2016. Nissan is taking a 34 percent stake in scandal-ridden Mitsubishi Motors in what Ghosn said was “a win-win” deal. Ghosn said Nissan will invest 237 billion yen ($2.2 billion) to become the top investor in Mitsubishi Motors. AP

TOKYO — Nissan, which is taking a 34 percent stake in scandal-ridden Japanese rival Mitsubishi Motors, suffered a 40 percent plunge in January-March profit as sales dipped and currency perks faded.

Nissan Motor Co. reported a 71 billion yen ($651 million) profit for the quarter Thursday. It had a 119 billion yen profit the same period of 2015.

Quarterly sales edged down 1.2 percent to 3.25 trillion yen ($29.8 billion).

A weak yen had worked as a plus for exporters like Yokohama-based Nissan, but the currency has been strengthening in recent months.

For the fiscal year, Nissan’s profit rose 15 percent to 523.8 billion yen ($4.8 billion). The automaker forecast a 525 billion yen ($4.8 billion) profit for the fiscal year through March 2017.

Chief Executive Carlos Ghosn announced Thursday that Nissan will spend 237 billion yen ($2.2 billion) to become the top investor in Mitsubishi Motors by purchasing newly issues shares.

Nissan shares dropped 1.4 percent in Tokyo trading as Japanese media reported that a deal with Mitsubishi was imminent. Mitsubishi Motors issues, on the other hand, surged 16 percent.

Mitsubishi Motors has been rocked by a scandal over cheating on mileage tests to inflate fuel economy figures for its minicar models. It had another scandal, over a systematic cover-up of auto defects, which surfaced in the early 2000s, but the wrongdoing had dated back decades. TVJ