Q1 2026 Nissan Motor Co Ltd Earnings Call

August 3, 2026

Speaker #1: Turning to financial results for fiscal year 2026. I'm Lavanya, and I'm from Nissan Global Communications. Today's session will run for one hour. We're meeting here, and the session is also being livestreamed.

Lavanya Wadgaonkar: financial results for fiscal year 2026. I'm Lavanya, and I'm from Nissan Global Communications. Today's session will run for 1 hour. We're meeting here, and the session is also being live-streamed. Let me start by introducing our speakers for today. Ivan Espinosa, Chief Executive Officer. George Leondis, Chief Financial Officer. I will hand over to Ivan to begin the session. Ivan?

Operator: financial results for fiscal year 2026. I'm Lavanya, and I'm from Nissan Global Communications. Today's session will run for 1 hour. We're meeting here, and the session is also being live-streamed. Let me start by introducing our speakers for today. Ivan Espinosa, Chief Executive Officer. George Leondis, Chief Financial Officer. I will hand over to Ivan to begin the session. Ivan?

Speaker #1: Let me start by introducing our speakers for today: Ivan Espinoza, Chief Executive Officer, and George Leondas, Chief Financial Officer. I will hand over to Ivan to begin the session.

Speaker #1: Ivan.

Speaker #2: Thank you, Lavanya. Good afternoon, everyone, and thank you all for joining us today here at Global Headquarters. Before we begin, I would like to express my heartfelt sympathies to all those affected by the earthquake in Kumamoto Prefecture.

Iván Espinosa: Thank you, Lavanya. Good afternoon, everyone, and thank you all for joining us today here in global headquarters. Before we begin, I would like to express my heartfelt sympathies to all of those affected by the earthquake in Kumamoto Prefecture. Our thoughts are with the impacted communities, and we sincerely hope for everyone's safety and swift recovery. I would also like to thank our colleagues and our partners for their resilience, dedication, and support during this challenging time. I will now begin with an update on Re:Nissan before I turn it over to George to review our Q1 results. Re:Nissan is gaining traction with tangible cost improvements and momentum building in key markets. At the same time, we are navigating significant industry challenges and are taking decisive actions to strengthen the resilience, agility, and competitiveness of our business.

Ivan Espinosa: Thank you, Lavanya. Good afternoon, everyone, and thank you all for joining us today here in global headquarters. Before we begin, I would like to express my heartfelt sympathies to all of those affected by the earthquake in Kumamoto Prefecture. Our thoughts are with the impacted communities, and we sincerely hope for everyone's safety and swift recovery. I would also like to thank our colleagues and our partners for their resilience, dedication, and support during this challenging time. I will now begin with an update on Re:Nissan before I turn it over to George to review our Q1 results. Re:Nissan is gaining traction with tangible cost improvements and momentum building in key markets. At the same time, we are navigating significant industry challenges and are taking decisive actions to strengthen the resilience, agility, and competitiveness of our business.

Speaker #2: Our thoughts are with the impacted communities, and we sincerely hope for everyone's safety and swift recovery. I would also like to thank our colleagues and our partners for their resilience, dedication, and support during these challenging times.

Speaker #2: I will now begin with an update on Renaissance before I turn it over to George to review our first quarter results. Renaissance is gaining traction, with tangible cost improvements and momentum building in key markets.

Speaker #2: At the same time, we are navigating significant industry challenges and are taking decisive actions to strengthen the resilience, agility, and competitiveness of our business.

Speaker #2: When we share our full-year results for fiscal year 2025, we will demonstrate the impact that our actions have delivered. We made measurable progress in our cost management efforts to build a new foundation for Nissan's future.

Iván Espinosa: When we share our full year results for fiscal year 2025, we demonstrated the impact that our actions have delivered. We made measurable progress in our cost management efforts to build a new foundation for Nissan's future. Our strategy is now translating into momentum in key markets around the world. However, global industry challenges, particularly in China and the Middle East, have affected parts of our business. This reinforces our focus on building agility and speed into the business to mitigate the impact of shifts and respond to opportunities. Now, first, let's talk about market momentum. The actions we have taken to strengthen our brands and connect with customers is shown in key markets like the United States and Japan. Our business in the US continues to deliver strong retail performance, with sales growing more than 9% year on year.

Ivan Espinosa: When we share our full year results for fiscal year 2025, we demonstrated the impact that our actions have delivered. We made measurable progress in our cost management efforts to build a new foundation for Nissan's future. Our strategy is now translating into momentum in key markets around the world. However, global industry challenges, particularly in China and the Middle East, have affected parts of our business. This reinforces our focus on building agility and speed into the business to mitigate the impact of shifts and respond to opportunities. Now, first, let's talk about market momentum. The actions we have taken to strengthen our brands and connect with customers is shown in key markets like the United States and Japan. Our business in the US continues to deliver strong retail performance, with sales growing more than 9% year on year.

Speaker #2: Our strategy is now translating into momentum in key markets around the world. However, global industry challenges, particularly in China and the Middle East, have affected parts of our business.

Speaker #2: This reinforces our focus on building agility and speed into the business to mitigate the impact of shifts and respond to opportunities. Now, first, let's talk about market momentum.

Speaker #2: The actions we have taken to strengthen our brands and connect with customers are shown in key markets like the United States and Japan. Our business in the U.S.

Speaker #2: continues to deliver strong retail performance, with sales growing more than 9% year on year. This growth is supported by the vehicles produced in the market.

Iván Espinosa: This growth is supported by the vehicles produced in the market. Pathfinder sales have increased 32% as the model deliver its best quarter ever, a significant achievement given the 40-year history of the nameplate in the US. Total deliveries of the Frontier pickup grew 35%. Nissan Rogue grew nearly 39% as we approach the launch of the all-new model with hybrid e-POWER technology later this year. Rogue also earned the top spot in J.D. Power Initial Quality Study, which was just released last month. We also see Infiniti making good progress as QX80 delivered its best Q1 sales performance in the model's history. Our all-new QX65 SUV is now on sale, bringing new buyers into Infiniti showrooms. Importantly, our results were supported by incentive effectiveness, ensuring that spending remains targeted and aligned with growth.

Ivan Espinosa: This growth is supported by the vehicles produced in the market. Pathfinder sales have increased 32% as the model deliver its best quarter ever, a significant achievement given the 40-year history of the nameplate in the US. Total deliveries of the Frontier pickup grew 35%. Nissan Rogue grew nearly 39% as we approach the launch of the all-new model with hybrid e-POWER technology later this year. Rogue also earned the top spot in J.D. Power Initial Quality Study, which was just released last month. We also see Infiniti making good progress as QX80 delivered its best Q1 sales performance in the model's history. Our all-new QX65 SUV is now on sale, bringing new buyers into Infiniti showrooms. Importantly, our results were supported by incentive effectiveness, ensuring that spending remains targeted and aligned with growth.

Speaker #2: Pathfinder sales have increased 32%, as the model delivered its best quarter ever—a significant achievement given the 40-year history of the nameplate in the U.S.

Speaker #2: Total deliveries of the Frontier pickup grew 35%. Nissan Rogue grew nearly 39% as we approached the launch of the all-new model with hybrid e-POWER technology later this year.

Speaker #2: Rogue also earned the top spot in the J.D. Power Initial Quality Study, which was just released last month. We also see Infiniti making good progress, as the QX80 delivered its best Q1 sales performance in the model's history.

Speaker #2: Our all-new QX65 SUV is now on sale, bringing new buyers into Infiniti's showrooms. Importantly, our results were supported by incentive effectiveness, ensuring that spending remains targeted and aligned with growth.

Speaker #2: In Japan, we are seeing our strong product lineup and enhanced marketing efforts beginning to pay off after a challenging period. Sales in the quarter grew 1%.

Iván Espinosa: In Japan, we are seeing our strong product lineup and enhanced marketing efforts beginning to pay off after a challenging period. Sales in the quarter grew 1%. Deliveries of the Roox increased by 52%. We also have two important new models, and we are seeing very strong demand building up. Since the reveal of the all-new Kicks with e-POWER technology, we have collected more than 11,000 customer orders. Our Elgrand premium van is off to a good start with more than 8,000 orders and deliveries starting last month. These are very strong indications that our plan is working, driving sales momentum in Nissan. We have seen that continue with July sales pacing ahead of the prior year totals. We are sincerely grateful to our customers for the renewed trust they are placing in our brand. That said, China remains a significant challenge for Nissan and the broader industry.

Ivan Espinosa: In Japan, we are seeing our strong product lineup and enhanced marketing efforts beginning to pay off after a challenging period. Sales in the quarter grew 1%. Deliveries of the Roox increased by 52%. We also have two important new models, and we are seeing very strong demand building up. Since the reveal of the all-new Kicks with e-POWER technology, we have collected more than 11,000 customer orders. Our Elgrand premium van is off to a good start with more than 8,000 orders and deliveries starting last month. These are very strong indications that our plan is working, driving sales momentum in Nissan. We have seen that continue with July sales pacing ahead of the prior year totals. We are sincerely grateful to our customers for the renewed trust they are placing in our brand. That said, China remains a significant challenge for Nissan and the broader industry.

Speaker #2: Deliveries of the Rogue increased by 52%. We also have two important new models, and we are seeing very strong demand building up. Since the reveal of the all-new Kicks with e-POWER technology, we have collected more than 11,000 customer orders.

Speaker #2: Our Elgrand Premium van is off to a good start, with more than 8,000 orders and deliveries starting last month. These are very strong indications that our plan is working, driving sales momentum in Nissan.

Speaker #2: And we have seen that continue with July sales pacing ahead of prior year totals. We are sincerely grateful to our customers for the renewed trust they are placing in our brand.

Speaker #2: That said, China remains a significant challenge for Nissan and the broader industry. In the first half of China’s fiscal year, the total industry volume declined 22% year-on-year, reflecting a rapidly evolving and increasingly competitive market.

Iván Espinosa: In the H1 of China's fiscal year, the total industry volume declined 22% year on year, reflecting a rapidly evolving and increasingly competitive market. Against that backdrop, Nissan's performance has been relatively resilient. In Q1, retail sales increased 7.2% year on year, supported by strong momentum from our recent N series launches. Nissan's total H1 sales declined 50%, outperforming the broader industry decline and resulting in a modest gain in market share. The market transition to new energy vehicles is accelerating rapidly. We have strengthened our position through several recent model launches, and our focus is now to accelerate the shift to NEVs and capture the opportunities created by this transition. Encouragingly, our NEV lineup is already gaining traction with Chinese customers, led by the N6, the N7, the NX8, and our Frontier Pro.

Ivan Espinosa: In the H1 of China's fiscal year, the total industry volume declined 22% year on year, reflecting a rapidly evolving and increasingly competitive market. Against that backdrop, Nissan's performance has been relatively resilient. In Q1, retail sales increased 7.2% year on year, supported by strong momentum from our recent N series launches. Nissan's total H1 sales declined 50%, outperforming the broader industry decline and resulting in a modest gain in market share. The market transition to new energy vehicles is accelerating rapidly. We have strengthened our position through several recent model launches, and our focus is now to accelerate the shift to NEVs and capture the opportunities created by this transition. Encouragingly, our NEV lineup is already gaining traction with Chinese customers, led by the N6, the N7, the NX8, and our Frontier Pro.

Speaker #2: Against that backdrop, Nissan's performance has been relatively resilient. In Q1, retail sales increased 7.2% year-on-year, supported by strong momentum from our recent N-series launches.

Speaker #2: Nissan's total first-half sales declined 50%, outperforming the broader industry decline and resulting in a modest gain in market share. The market transition to new energy vehicles is accelerating rapidly.

Speaker #2: We have strengthened our positions through several recent model launches, and our focus is now to accelerate the shift to NEVs and capture the opportunities created by this transition.

Speaker #2: Encouragingly, our NEV lineup is already gaining traction with Chinese customers, led by the N6, N7, NX8, and our Frontier Pro. We are also expanding our export business, with shipments starting from July, creating additional opportunities beyond the domestic market.

Iván Espinosa: We are also expanding our export business with shipments starting from July, creating additional opportunities beyond the domestic market. The uncertainty in the Middle East is another major challenge. While customer demand for Nissan's vehicles remains resilient, we have seen disruptions to logistics and supply chains. We have identified alternative shipping lanes into markets in the region, mitigating some of the impact. However, elevated logistics costs associated with these alternative routes and the ongoing geopolitical uncertainty are expected to moderate profitability until supply chains normalize. Now, let's shift to an update on Re:Nissan cost management actions. In Q1, we saw the impact of our efforts grow further with a combined total of JPY 60 billion in fixed and variable cost savings recognized. Our 20% reduction target in engineering cost per hour has been achieved three quarters ahead of schedule. We have seen strong expense control deliver fixed cost improvements.

Ivan Espinosa: We are also expanding our export business with shipments starting from July, creating additional opportunities beyond the domestic market. The uncertainty in the Middle East is another major challenge. While customer demand for Nissan's vehicles remains resilient, we have seen disruptions to logistics and supply chains. We have identified alternative shipping lanes into markets in the region, mitigating some of the impact. However, elevated logistics costs associated with these alternative routes and the ongoing geopolitical uncertainty are expected to moderate profitability until supply chains normalize. Now, let's shift to an update on Re:Nissan cost management actions. In Q1, we saw the impact of our efforts grow further with a combined total of JPY 60 billion in fixed and variable cost savings recognized. Our 20% reduction target in engineering cost per hour has been achieved three quarters ahead of schedule. We have seen strong expense control deliver fixed cost improvements.

Speaker #2: The uncertainty in the Middle East is another major challenge. While customer demand for Nissan's vehicles remains resilient, we have seen disruptions to logistics and supply chains.

Speaker #2: We have identified alternative shipping lanes into markets in the region, mitigating some of the impact. However, elevated logistics costs associated with these alternative routes and ongoing geopolitical uncertainty are expected to moderate profitability until supply chains normalize.

Speaker #2: Now, let's shift to an update on Renaissance cost management actions. In Q1, we saw the impact of our efforts grow further. With a combined total of $60 billion in fixed and variable cost savings recognized, our 20% reduction target in engineering cost per hour has been achieved three quarters ahead of schedule.

Speaker #2: We have seen strong expense control and delivered fixed cost improvements. On variable costs, we are driving greater implementation of ideas generated by our OVIJA activities, working in partnership with teams across the company and with our suppliers.

Iván Espinosa: On variable costs, we are driving greater implementation of ideas generated by our Obeya activities, working in partnership with teams across the company and with our suppliers. Combined with the JPY 255 billion in total fixed and variable reductions that we achieved in FY25, this brings the running impact linked to Re:Nissan actions to around JPY 315 billion. The work is not done. Our actions ensure that we remain on track to deliver JPY 500 billion cost reduction by the end of this fiscal year, and we will continue forward. Now, I would like to hand over to George to take you through the Q1 results. George?

Ivan Espinosa: On variable costs, we are driving greater implementation of ideas generated by our Obeya activities, working in partnership with teams across the company and with our suppliers. Combined with the JPY 255 billion in total fixed and variable reductions that we achieved in FY25, this brings the running impact linked to Re:Nissan actions to around JPY 315 billion. The work is not done. Our actions ensure that we remain on track to deliver JPY 500 billion cost reduction by the end of this fiscal year, and we will continue forward. Now, I would like to hand over to George to take you through the Q1 results. George?

Speaker #2: Combined with the ¥255 billion in total fixed and variable reductions that we achieved in FY25, this brings the running impact linked to Renaissance actions to around ¥315 billion.

Speaker #2: But the work is not done. Our actions ensure that we remain on track to deliver a $500 billion cost reduction by the end of this fiscal year, and we will continue forward.

Speaker #2: Now, I would like to hand over to George to take you through the Q1 results. George.

Speaker #3: Thank you, Ivan, and good afternoon, everyone. As Ivan outlined, our first quarter results reflect both the momentum we are building and the realities of a challenging operating environment.

George Leondis: Thank you, Ivan, and good afternoon, everyone. As Ivan outlined, our Q1 results reflect both the momentum we are building and the realities of a challenging operating environment. For the 3 months to 30 June, Nissan sold over 700,000 units. Unit sales were almost flat year-on-year, which is a solid result given the competitive global environment and continued volatility in the Middle East. Turning to our key markets. First, China. Unit sales rose by 7.2% as demand for Nissan's new energy vehicles enabled us to withstand increasingly challenging market conditions in the period from January to March. From April to June, the market conditions weakened further, Nissan sales declined by 15%, but this was versus a 22% decline in total industry volume in H1.

Speaker #3: For the three months to June 30, Nissan sold over 700,000 units. Unit sales were almost flat year-on-year, which is a solid result given the competitive global environment and continued volatility in the Middle East.

Speaker #3: Turning to our key markets—first, China. Unit sales rose by 7.2% as demand for Nissan's new energy vehicles enabled us to withstand increasingly challenging market conditions in the period from January to March.

Speaker #3: From April to June, the market conditions weakened further, and Nissan sales declined by 15%, but this was versus a 22% decline in total industry volume in the first half.

Speaker #3: In Japan, we saw early signs of recovery, with unit sales rising by 1.3% and strong customer demand for new models such as the Kicks. In North America, sales were up by 4.2% and increased by 9.6% in the U.S. market, thanks to contributions from the Rogue, the Pathfinder, and the Frontier.

George Leondis: In Japan, we saw early signs of recovery with unit sales rising by 1.3% and strong customer demand for new models such as Kicks. In North America, sales were up by 4.2% and increased by 9.6% in the US market, thanks to contributions from the Rogue, the Pathfinder, and the Frontier. In Europe, sales declined by 14.6% amid intense competition and portfolio optimization. In the rest of the world, sales declined by 16.8%, driven primarily by disruption in the Middle East that Ivan outlined earlier. Overall, unit sales fell by 2.5% year-on-year, excluding China, production fell by 4% as we adjusted output to meet demand. Q1 financial performance. Turning to our financial performance, consolidated net revenues rose by 9.5% year-on-year, primarily driven by favorable foreign exchange rate with additional support from improved revenue quality through pricing and improved product mix.

Speaker #3: In Europe, sales declined by 14.6%, amid intense competition and portfolio optimization. In the rest of the world, sales declined by 16.8%, driven primarily by disruption in the Middle East that Ivan outlined earlier.

Speaker #3: Overall, unit sales fell by 2.5% year on year, excluding China, and production fell by 4% as we adjusted output to meet demand. Q1 financial performance.

Speaker #3: Turning to our financial performance, consolidated net revenues rose by 9.5% year-on-year, primarily driven by a favorable foreign exchange rate, with additional support from improved revenue quality through pricing and an improved product mix.

Speaker #3: Operating profit reached ¥77.9 billion, an increase of ¥157 billion from the prior year. Net income was $3.8 billion, reversing losses in the previous year quarter.

George Leondis: Operating profit reached JPY 77.9 billion, an increase of JPY 157 billion from the prior year. Net income was JPY 3.8 billion, reversing losses in the previous year quarter. CapEx was approximately JPY 114 billion. While this is an overall reduction, we actually increased CapEx spend in support of new product programs. R&D spending was JPY 120 billion, demonstrating our continued investment discipline as part of the Re:Nissan plan. In the automotive business, including eliminations, net revenue was JPY 2.6 trillion. Automotive operating loss was JPY 8.3 billion, near breakeven, including the impact of the cost of tariffs. Automotive free cash flow improved to JPY 324 billion, an increase of nearly JPY 67 billion year-on-year. However, excluding one-time impacts in Q1, the improvement in our free cash flow was actually JPY 100 billion.

Speaker #3: Capex was approximately ¥114 billion. While this is an overall reduction, we actually increased capex spend in support of new product programs. R&D spending was ¥120 billion, demonstrating our continued investment discipline as part of the Renaissance Plan.

Speaker #3: In the automotive business, including eliminations, net revenue was ¥2.6 trillion. Automotive operating loss was ¥8.3 billion, near break-even including the impact of the cost of tariffs.

Speaker #3: Automotive free cash flow improved to ¥324 billion, an increase of nearly ¥67 billion year on year. However, excluding one-time impacts in the first quarter, the improvement in our free cash flow was actually ¥100 billion.

Speaker #3: At the end of the prior period, net cash stood at a healthy ¥970 billion. We retain solid liquidity, with more than ¥2.1 trillion of automotive cash and cash equivalents on hand.

George Leondis: At the end of the prior period, net cash stood at a healthy JPY 970 billion. We retain solid liquidity with more than JPY 2.1 trillion of automotive cash and cash equivalents on hand. I will now explain the operating profit bridge. Foreign exchange contributed a +JPY 35 billion impact, largely driven by the depreciation of the yen against the US dollar. Higher raw material costs, primarily for aluminum and copper, had a -JPY 24 billion impact. Tariffs had a +JPY 18.3 billion impact. Sales performance improved by JPY 23.7 billion due to favorable pricing and selling expenses, particularly offsetting the raw material headwinds I just mentioned. Monozukuri savings contributed around JPY 82 billion, reflecting Re:Nissan driven variable cost reductions. Inflation remained a headwind with a -JPY 14 billion impact. One-time gains contributed JPY 32 billion, including JPY 61 billion related to FY25 US tariffs clawbacks.

Speaker #3: I will now explain the operating profit bridge. Foreign exchange contributed a positive impact of $35 billion, largely driven by the depreciation of the yen against the US dollar.

Speaker #3: Higher raw material costs, primarily for aluminum and copper, had a negative impact of ¥24 billion. Tariffs had a positive impact of ¥18.3 billion. Sales performance improved by ¥23.7 billion due to favorable pricing and selling expenses.

Speaker #3: Particularly offsetting the raw material headwinds I just mentioned, monozukuri savings contributed around $82 billion, reflecting Renaissance-driven variable cost reductions. Inflation remained a headwind, with a negative impact of $14 billion.

Speaker #3: One-time gains contributed $32 billion, including $6.1 billion related to FY25 U.S. tariffs clawbacks. Other items contributed a positive $4 billion. Taking all these factors together, operating profit reached $7.79 billion.

George Leondis: Other items contributed JPY +4 billion. Taking all these factors together, operating profit reached JPY 77.9 billion. I will now turn to our outlook for the current fiscal year. Although sales volumes were broadly flat in Q1, we are indeed revising our full year sales volume outlook to 3.15 million units. This reflects the impact of the deterioration of industry sales in China and the continued uncertainty in the Middle East. As a result, we are also revising our production outlook to 2.8 million units for the fiscal year. The outlook for fiscal 2026, we reaffirm our outlook for revenue of JPY 13 trillion, and we reaffirm our operating profit of JPY 200 billion. This represents revenue growth of 8.3% year-on-year and an operating margin of 1.5%. Net income is expected to be JPY 20 billion. The variance analysis.

Speaker #3: I will now turn to our outlook for the current fiscal year. Although sales volumes were broadly flat in the first quarter, we are indeed revising our full-year sales volume outlook to 3.15 million units.

Speaker #3: This reflects the impact of the deterioration of industry sales in China and the continued uncertainty in the Middle East. As a result, we are also revising our production outlook to 2.8 million units for the fiscal year.

Speaker #3: The outlook: For fiscal 2026, we reaffirm our outlook for revenue of $13 trillion, and we reaffirm our operating profit of $200 billion. This represents revenue growth of 8.3% year on year and an operating margin of 1.5%.

Speaker #3: Net income is expected to be ¥20 billion. Regarding variance analysis, I will now explain the key factors behind our maintained profit outlook. We expect continued pressure from raw material costs, particularly for aluminum, copper, and oil-related materials.

George Leondis: I will now explain the key factors behind our maintained profit outlook. We expect continued pressure from raw material costs, particularly for aluminum, copper, and oil-related materials, especially as purchase prices still remain elevated. In the Middle East, geopolitical tensions and shipping constraints are expected to persist, resulting in higher logistics costs and pressure on volumes despite the resilient customer demand. Given the evolving situation, we continue to monitor the impact closely, and we will update our assessment as visibility improves. There may also be some upside from foreign exchange if the yen remains at current levels. In addition, one-time gains recognized in Q1, together with offsetting factors, are expected to help mitigate some of these headwinds. Taking these factors all into account, we remain confident in our ability to balance those risks and opportunities and therefore we reaffirm our operating profit outlook of JPY 200 billion.

Speaker #3: Especially as purchase prices still remain elevated. In the Middle East, geopolitical tensions and shipping constraints are expected to persist, resulting in higher logistics costs and pressure on volumes despite the resilient customer demand.

Speaker #3: Given the evolving situation, we continue to monitor the impact closely and will update our assessment as visibility improves. There may also be some upside from foreign exchange if the yen remains at current levels.

Speaker #3: In addition, one-time gains recognized in the first quarter, together with offsetting factors, are expected to help mitigate some of these headwinds. Taking these factors all into account, we remain confident in our ability to balance those risks and opportunities, and therefore we reaffirm our operating profit outlook of ¥200 billion.

Speaker #3: That concludes my remarks. I will now hand back to Ivan to summarize the quarter.

George Leondis: That concludes my remarks. I will now hand back to Ivan to summarize the quarter.

Speaker #1: Thank you. Thank you, George. To sum up, we see signs of progress in our first quarter. We grew sales in the important US and Japan markets. Our operating profit improved by ¥157 billion, with automotive operating profit nearly breaking even, including tariffs, and positive net income was achieved.

Iván Espinosa: Thank you. Thank you, George. To sum up, we see signs of progress in our Q1. We grew sales in the important US and Japan markets. Our operating profit improved by JPY 157 billion, with automotive operating profit nearly breaking even, including tariff and positive net income is achieved. Cost reduction activities delivered more than JPY 60 billion, keeping us on track to reach JPY 500 billion by the end of the fiscal year. We maintained automotive net cash at around JPY 1 trillion level. We are taking actions to manage our inventory and leverage our NEV lineup to combat the industry declines in China. In the Middle East, cost increases to overcome logistics and supply chain challenges will continue to have an impact on profit, even though demand for Nissan in the region remains robust.

Ivan Espinosa: Thank you. Thank you, George. To sum up, we see signs of progress in our Q1. We grew sales in the important US and Japan markets. Our operating profit improved by JPY 157 billion, with automotive operating profit nearly breaking even, including tariff and positive net income is achieved. Cost reduction activities delivered more than JPY 60 billion, keeping us on track to reach JPY 500 billion by the end of the fiscal year. We maintained automotive net cash at around JPY 1 trillion level. We are taking actions to manage our inventory and leverage our NEV lineup to combat the industry declines in China. In the Middle East, cost increases to overcome logistics and supply chain challenges will continue to have an impact on profit, even though demand for Nissan in the region remains robust.

Speaker #1: Cost reduction activities delivered more than ¥60 billion, keeping us on track to reach ¥500 billion by the end of the fiscal year. And we maintained automotive net cash at around the ¥1 trillion level.

Speaker #1: We are taking actions to manage our inventory and leverage our NEV lineup to combat the industry declines in China. In the Middle East, cost increases to overcome logistics and supply chain challenges will continue to have an impact on profit, even though demand for Nissan in the region remains robust.

Speaker #1: With the progress we are seeing, combined with one-time impacts, we expect to offset these significant challenges. All our financial targets, such as ¥200 billion operating profit and net income of ¥20 billion, are reaffirmed.

Iván Espinosa: With the progress we are seeing, combined with one-time impacts, we expect to offset these significant challenges. All our financial targets, such as JPY 200 billion operating profit and net income of JPY 20 billion, are reaffirmed. Our revised volume outlook primarily reflects the changed market conditions in China. Delivering this outlook will take focused market-specific strategies in each region. In the US, we will continue to leverage our locally produced vehicles to grow our sales and prepare for the launch of very important new models like the new Nissan Rogue Hybrid e-POWER in H2. In Japan, we will build on our recovery actions and leverage interest in exciting new models like Kicks and Elgrand to return to a sustainable double-digit market share.

Ivan Espinosa: With the progress we are seeing, combined with one-time impacts, we expect to offset these significant challenges. All our financial targets, such as JPY 200 billion operating profit and net income of JPY 20 billion, are reaffirmed. Our revised volume outlook primarily reflects the changed market conditions in China. Delivering this outlook will take focused market-specific strategies in each region. In the US, we will continue to leverage our locally produced vehicles to grow our sales and prepare for the launch of very important new models like the new Nissan Rogue Hybrid e-POWER in H2. In Japan, we will build on our recovery actions and leverage interest in exciting new models like Kicks and Elgrand to return to a sustainable double-digit market share.

Speaker #1: Our revised volume outlook primarily reflects the changed market conditions in China. Delivering this outlook will take focused, market-specific strategies in each region. In the US, we will continue to leverage our locally produced vehicles to grow our sales and prepare for the launch of very important new models, like the new Nissan Rogue Hybrid e-Power, in the second half.

Speaker #1: In Japan, we will build on our recovery actions and leverage interest in exciting new models like the Kicks and Elgrand to return to a sustainable double-digit market share.

Speaker #1: In China, together with our JV partner, we will manage inventories in line with the market and rebalance our sales mix to grow our NEV sales, with models like the new NX8 joining the N6, N7, and the Nissan Frontier Pro.

Iván Espinosa: In China, together with our JV partner, we will manage inventories in line with the market and rebalance our sales mix to grow our NEV sales with models like the new NX8 joining N6, N7 and the Nissan Frontier Pro. This better positions us for growth in 2027. One of the biggest shifts under Re:Nissan is how quickly we are responding to challenges and adapting to changing market conditions. I'm truly energized by the commitment I see from the Nissan teams around the world. Whether supporting growth in our key markets, responding to customer demand in the Middle East, or strengthening competitiveness across our business, we are taking the actions needed to deliver our outlook. Thank you very much for your attention.

Ivan Espinosa: In China, together with our JV partner, we will manage inventories in line with the market and rebalance our sales mix to grow our NEV sales with models like the new NX8 joining N6, N7 and the Nissan Frontier Pro. This better positions us for growth in 2027. One of the biggest shifts under Re:Nissan is how quickly we are responding to challenges and adapting to changing market conditions. I'm truly energized by the commitment I see from the Nissan teams around the world. Whether supporting growth in our key markets, responding to customer demand in the Middle East, or strengthening competitiveness across our business, we are taking the actions needed to deliver our outlook. Thank you very much for your attention.

Speaker #1: This better positions us for growth in 2027. One of the biggest shifts under Renaissance is how quickly we are responding to challenges and adapting to changing market conditions.

Speaker #1: I'm truly energized by the commitment I see from the Nissan teams around the world. Whether supporting growth in our key markets, responding to customer demand in the Middle East, or strengthening competitiveness across our business, we are taking the actions needed to deliver our outlook.

Speaker #1: Thank you very much for your attention.

Speaker #2: Thank you, Ivan. We'll now open the floor for Q&A. Please raise your hand if you have a question, and our team will come to you with the mic.

Lavanya Wadgaonkar: Thank you, Ivan. We'll now open the floor for Q&A. Please raise your hand if you have a question, and our team will come to you with the mic. To help us manage time, could you please restrict it to two questions per person? I see the first hand stand up right in the front.

Operator: Thank you, Ivan. We'll now open the floor for Q&A. Please raise your hand if you have a question, and our team will come to you with the mic. To help us manage time, could you please restrict it to two questions per person? I see the first hand stand up right in the front.

Speaker #2: To help us manage time, could you please restrict it to two questions per person? So, I see the first hand pent up right in the front.

Speaker #4: Hello, Hans Greimel from Automotive News. Thank you for calling me, and thank you for your presentation. I'm wondering if you can tell us a little bit more about how important North America will be for offsetting the sales decline you're going to see—or you're predicting—globally?

Hans Greimel: Hans Greimel from Automotive News. Thank you for calling on me, and thank you for your presentation. I'm wondering if you can tell us a little bit more about how important North America will be for offsetting the sales decline you're going to see or you're predicting globally. You still kept the outlook unchanged for North America. What makes you think that you can hold that? Maybe you can give us an outlook for the US, in particular, for this fiscal year, a US specific fiscal year target, maybe. How important is that US stronghold now to offsetting China and the Middle East in particular?

Speaker #4: You still kept the outlook unchanged for North America. What makes you think that you can hold that, and maybe you can give us an outlook for the US in particular for this fiscal year, or a US-specific fiscal year target, maybe?

Speaker #4: How important is that U.S. stronghold now to offsetting China and the Middle East in particular?

Speaker #3: Yeah, thank you, Hans. And as you've heard me say before, I'm not in a race for volume. I'm focused on recovering the fundamentals of the company. As such, of course, we need to keep performing in North America.

Iván Espinosa: Yeah. Thank you, Hans, you've heard me before, I'm not in a race for volume. I'm recovering the fundamentals of the company. As such, of course, we need to keep performing in North America. The traction is very good, very strong, as you heard, 9% growth year over year. We have very strong performance in the different vehicle lines. It means the strategy is working. We will continue focusing our efforts in the same strategy. Building cars in North America, cars that are tariff-free, cars that are profitable. We will continue with this sharp focus on the strategy. Specifics, I think you saw our outlook for volume. This is what we have announced. We are going to continue pushing on that direction, Hans. Yeah. As for the importance, of course, every market is important.

Ivan Espinosa: Yeah. Thank you, Hans, you've heard me before, I'm not in a race for volume. I'm recovering the fundamentals of the company. As such, of course, we need to keep performing in North America. The traction is very good, very strong, as you heard, 9% growth year over year. We have very strong performance in the different vehicle lines. It means the strategy is working. We will continue focusing our efforts in the same strategy. Building cars in North America, cars that are tariff-free, cars that are profitable. We will continue with this sharp focus on the strategy. Specifics, I think you saw our outlook for volume. This is what we have announced. We are going to continue pushing on that direction, Hans. Yeah. As for the importance, of course, every market is important.

Speaker #3: The traction is very good, very strong as you heard—9% growth year over year. And we have very strong performance across the different vehicle lines.

Speaker #3: It means the strategy is working, and we will continue focusing our efforts on the same strategy—building cars in North America, cars that are tariff-free, cars that are profitable—and we will continue with this sharp focus on the strategy.

Speaker #3: Specifically, I think you saw our outlook for volume. This is what we have announced, and we are going to continue pushing in that direction, Hans.

Speaker #3: Yes, as for the importance—of course, every market is important. There is no one market more important than another when you're running a business like ours.

Iván Espinosa: There is no one market more important than the other when you're running a business like ours. Every single market has to deliver. This is what we are focusing on.

Ivan Espinosa: There is no one market more important than the other when you're running a business like ours. Every single market has to deliver. This is what we are focusing on.

Speaker #3: So, every single market has to deliver, and this is what we are focusing on.

Speaker #4: Can you give a breakdown of the U.S. versus North America?

Hans Greimel: Can you give a breakdown of the US versus North America?

Speaker #3: No, I don't think we're giving a breakdown for the U.S. and the total North America markets today, Hans.

Iván Espinosa: No, I don't think we're giving a breakdown with the US and the total North America markets today, Hans.

Ivan Espinosa: No, I don't think we're giving a breakdown with the US and the total North America markets today, Hans.

Speaker #4: Can you give us maybe a percentage range of the increase?

Hans Greimel: Can you give us maybe a percentage range of increase?

Speaker #3: Again, we are not giving a breakdown. Thank you for the question.

Iván Espinosa: Again, we are not giving a breakdown. Thank you for the question.

Ivan Espinosa: Again, we are not giving a breakdown. Thank you for the question.

Speaker #2: Thank you. If I could go to the person, third person from the right—yes, please.

Lavanya Wadgaonkar: Thank you. If I go to the third person from the right. Yes, please.

Operator: Thank you. If I go to the third person from the right. Yes, please.

Speaker #5: Nikkei Shimbun, Matsumoto speaking. Thank you for this opportunity. Talking about the outlook in China, which was revised—it's been three months that you have been changing the number.

[Company Representative] (Nikkei Shinbun): Nikkei Shimbun, Matsumoto is speaking. Thank you for this opportunity. Talking about outlook in China, which was revised, and it has been three months you are changing the number. I think there was a sharp change in China. What was different from your assumption? What didn't you foresee? Was it a change in the policy or regulation, or is it about macroeconomy? In the past three months, there was a reason why you had to make a revision, and what was the particular reason behind this?

Speaker #5: I think there was a sharp change in China. What was different from your assumption? What didn't you foresee? Was it the change in the policy or regulation, or is it about the macroeconomy in the past three months?

Speaker #5: There was a reason—why you had to make a revision, and what was the particular reason behind this?

Speaker #3: Thank you. Yes, we see a couple of things. One is the economy itself slowed down at the beginning of the year, particularly in the second quarter.

Iván Espinosa: Thank you. Yeah, we see a couple of things. One is the economy itself has slowed down at the beginning of a year, particularly Q2. Second is the Iran war had an impact on the fuel costs, this further accelerated the shift to NEV. This is basically what is driving this behavior change in the market. As such, what we're doing is, the good thing is we have a product ready. We have NEVs that are ready and are performing well. What we have to do is to shift quickly our inventory into more NEV product. Together with a strong commercial policy around NEVs that we are putting in place. We have a regionalized approach versus 1 year ago, we were operating in China with one nationwide commercial policy.

Ivan Espinosa: Thank you. Yeah, we see a couple of things. One is the economy itself has slowed down at the beginning of a year, particularly Q2. Second is the Iran war had an impact on the fuel costs, this further accelerated the shift to NEV. This is basically what is driving this behavior change in the market. As such, what we're doing is, the good thing is we have a product ready. We have NEVs that are ready and are performing well. What we have to do is to shift quickly our inventory into more NEV product. Together with a strong commercial policy around NEVs that we are putting in place. We have a regionalized approach versus 1 year ago, we were operating in China with one nationwide commercial policy.

Speaker #3: Second is the Iran war had an impact on the fuel costs, and this further accelerated the shift to NEV. And this is basically what is driving this behavior change in the market.

Speaker #3: And as such, what we're doing is—the good thing is, we have a product ready. So we have NEVs that are ready and are performing well.

Speaker #3: What we have to do is quickly shift our inventory into more NEV products. Together with the strong commercial policy around NEVs that we are putting in place, we now have a regionalized approach. Versus a year ago, we were operating in China with one nationwide commercial policy.

Speaker #3: We are moving away from that into a more regionally-oriented commercial policy, because depending on the part of the country that you are looking at, some provinces are a lot more NEV-heavy and some provinces are still a bit more heavy on ICE.

Iván Espinosa: We are moving away from that into a more regional-oriented commercial policy because depending on the part of a country that you're looking at, some provinces are a lot more NEV heavy and some provinces are still a bit more heavy on ICE. You cannot have one commercial policy for the whole country, what we're doing is running the business on a more regionalized approach. This is what we're doing, as I said, this is what made the change, both the impact on the TIV as well as the shift on the mix to more NEV product demand. Hope that answers the question.

Ivan Espinosa: We are moving away from that into a more regional-oriented commercial policy because depending on the part of a country that you're looking at, some provinces are a lot more NEV heavy and some provinces are still a bit more heavy on ICE. You cannot have one commercial policy for the whole country, what we're doing is running the business on a more regionalized approach. This is what we're doing, as I said, this is what made the change, both the impact on the TIV as well as the shift on the mix to more NEV product demand. Hope that answers the question.

Speaker #3: So you cannot have one commercial policy for the whole country. What we're doing is running the business on a more regionalized approach. This is what we're doing, and as I said, this is what made the change—both the impact on the TIV as well as the shift in the mix to more NEV product demand.

Speaker #3: Hope that answers the question.

Speaker #4: Hi.

[Company Representative] (Nikkei Shinbun): Okay. Thank you. In relation to this earlier question, Re:Nissan, 1 million units is the number that you are pursuing. In order to attain this number, Chinese circumstances should be better than what we see today. In order to make things better, what do you need? What is visible? Until when will the circumstances remain? Is there any visibility that will help you increase and attain 1 million units?

Speaker #5: Okay, thank you. In relation to this earlier question, Renaissance, one billion units is the number that you are pursuing. In order to attain this number, Chinese circumstances should be better than what we see today.

Speaker #5: In order to make things better, what do you need? What is visible? Until when will these circumstances remain? Is there any visibility that will help you increase and attain 1 million units?

Speaker #3: One clarification: we don't have a 1 million target for Renaissance in China. We gave a long-term ambition of 1 million, combining domestic sales plus some exports.

Iván Espinosa: 1 clarification. We don't have a 1 million target for Re:Nissan in China. We gave a long-term ambition of 1 million, combining domestic sales plus some exports. This is what we aspire to achieve. Now how to get there, of course, we need to push more on the quick shift to NEV. We need to consistently deliver products that are hitting the market the way our NEVs are doing. Also, we presented a couple of SUVs in the motor show in Shanghai Motor Show. We presented these 2 products that are coming quite soon, later this year, and the reception of those products was quite strong. We expect to continue building on the back of new product with this regionalized approach. We will start also the exports quite soon.

Ivan Espinosa: 1 clarification. We don't have a 1 million target for Re:Nissan in China. We gave a long-term ambition of 1 million, combining domestic sales plus some exports. This is what we aspire to achieve. Now how to get there, of course, we need to push more on the quick shift to NEV. We need to consistently deliver products that are hitting the market the way our NEVs are doing. Also, we presented a couple of SUVs in the motor show in Shanghai Motor Show. We presented these 2 products that are coming quite soon, later this year, and the reception of those products was quite strong. We expect to continue building on the back of new product with this regionalized approach. We will start also the exports quite soon.

Speaker #3: So, this is what we aspire to achieve. Now, how do we get there? Of course, we need to push more on the quick shift to NEV.

Speaker #3: And we need to consistently deliver products that are hitting the market the way our NEVs are doing. We also presented a couple of SUVs at the motor show in Beijing, at the Shanghai Motor Show.

Speaker #3: We presented these two products that are coming quite soon, later this year. And the reception of those products was quite strong. So we expect to continue building on the back of new product.

Speaker #3: With this regionalized approach, we will also start exports quite soon. Around the end of the second half of this year, we will begin deliveries of products outside of China.

Iván Espinosa: Around end of H2 of this year, we'll start the deliveries of products outside of China, starting with the N7 to some markets, as well as the Frontier Pro, and the NX8 will follow. With these combined actions, we expect that the volume will gradually continue growing in the midterm. Thank you for the question.

Ivan Espinosa: Around end of H2 of this year, we'll start the deliveries of products outside of China, starting with the N7 to some markets, as well as the Frontier Pro, and the NX8 will follow. With these combined actions, we expect that the volume will gradually continue growing in the midterm. Thank you for the question.

Speaker #3: Starting with the N7 to some markets as well as the Frontier Pro. And the NX8 will follow. So, with these combined actions, we expect that the volume will gradually continue growing in the midterm. Thank you.

Speaker #3: Thank you for the question.

Speaker #2: Thank you. If we could go to the first person in the third row, please. Thank you. Yes.

Lavanya Wadgaonkar: Thank you. If we go to the first person on the third row. Thank you. Yes.

Operator: Thank you. If we go to the first person on the third row. Thank you. Yes.

Speaker #5: NHK. Taruno is speaking. Thank you for this opportunity. Regarding the impact of the Kumamoto earthquake, what was it in Fukuoka Prefecture? There are two productions you have announced to suspend the operation.

[Company Representative] (NHK): NHK. Haruno is speaking. Thank you for this opportunity. Kumamoto earthquake impact, what was it? In Fukuoka Prefecture, there are two production you have announced to suspend operation. Will this result in the suspension of operation in other plants elsewhere? Will this be lasting? What is the visibility and projection with regards to the impact of the earthquake in Kumamoto?

Speaker #5: Will this result in the suspension of operations in other plants elsewhere? Will this be lasting? And what is the visibility and projection with regards to the impact of the earthquake in Kumamoto?

Speaker #3: Thank you for the question. We are monitoring the situation very closely. It's evolving. At the moment, the visibility we have is that we will have some partial stops this week.

Iván Espinosa: Thank you for the question. We are monitoring the situation very closely. It's evolving. At the moment, the visibility we have is that we will have some partial stops this week, and the visibility is around 5,000 units that we are still checking scheduling to see how quick can we recover them. Again, the situation is quite fluid, and we will continue sharing information with you as we get more clarity. Thank you.

Ivan Espinosa: Thank you for the question. We are monitoring the situation very closely. It's evolving. At the moment, the visibility we have is that we will have some partial stops this week, and the visibility is around 5,000 units that we are still checking scheduling to see how quick can we recover them. Again, the situation is quite fluid, and we will continue sharing information with you as we get more clarity. Thank you.

Speaker #3: And the visibility is around 5,000 units. We are still checking scheduling to see how quickly we can recover them. But again, the situation is quite fluid, and we will continue sharing information with you as we get more clarity.

Speaker #3: Thank you.

Speaker #2: Thank you very much. If you can, please come to the right, second row.

Lavanya Wadgaonkar: Thank you very much. If you can come to the right, second row.

Operator: Thank you very much. If you can come to the right, second row.

Tsuyoshi Inajima: Oh.

Speaker #5: Thank you for the presentation, Yomi Uri. My name is Takamura. I have two questions. First of all, performance outlook was maintained. What's the reason?

[Company Representative] (Yomiuri): Thank you for the presentation. Yomiuri. My name is Sakamura. I have two questions. First of all, performance outlook was maintained. What's the reason? Volume target was reduced. Despite the reduction in volume outlook, you maintained the performance, and I'm focusing on page 13. You said multiple positive factors. Can you elaborate? That's my first question.

Speaker #5: The volume target was reduced. But despite the reduction in volume outlook, you maintained the performance, and I'm focusing on page 13. You said there were multiple positive factors—can you elaborate?

Speaker #5: That's my first question.

Speaker #3: Yeah, the volume from China has a small impact on our operating performance or operating profit. Because of the way we consolidate the business—maybe George can give more detail if needed.

Iván Espinosa: Yeah. The volume from China has a small impact in our operating performance or operating profit, because the way we consolidate the business. Maybe George can give more detail if needed, but this is why you don't see a decrease in our operating profit. On top, in China, we expect the volume to start recovering in H2 as well. We see that the TIV might start recovering according to some of the forecasts that we are reading. We expect that the volume will help stabilizing a bit in H2, and we have already started, of course, cost controlling measures in China as well. On the operating side of operating profit, we won't see an impact. That's why we are confident to continue with our outlook.

Ivan Espinosa: Yeah. The volume from China has a small impact in our operating performance or operating profit, because the way we consolidate the business. Maybe George can give more detail if needed, but this is why you don't see a decrease in our operating profit. On top, in China, we expect the volume to start recovering in H2 as well. We see that the TIV might start recovering according to some of the forecasts that we are reading. We expect that the volume will help stabilizing a bit in H2, and we have already started, of course, cost controlling measures in China as well. On the operating side of operating profit, we won't see an impact. That's why we are confident to continue with our outlook.

Speaker #3: But this is why you don't see a decrease in our operating profit. On top of that, in China, we expect the volume to start recovering in the second half of the year as well.

Speaker #3: We see that the TIV might start recovering according to some of the forecasts that we are reading. So we expect that the volume will help stabilize a bit in the second half of the year.

Speaker #3: And we have already started, of course, cost-controlling measures in China as well. So, on the operating side of operating profit, we won't see an impact.

Speaker #3: That's why we are confident to continue with our outlook, and also because we see strong performance in some markets, as we explained earlier during the presentation.

Iván Espinosa: Because we see strong performance in some markets, as we explained earlier during the presentation. Thank you for the question. I don't know, George, if you want to complement that.

Ivan Espinosa: Because we see strong performance in some markets, as we explained earlier during the presentation. Thank you for the question. I don't know, George, if you want to complement that.

Speaker #3: Yeah, thank you. Thank you for the question. I don't know, George, if you want to comment on that.

Speaker #4: If I may add, Yvonne, thanks for the question. Yes, we are reaffirming our outlook of ¥200 billion. In the first quarter, we generated almost ¥78 billion, with some one-time impacts in there. If you take out those one-time impacts...

George Leondis: If I may add, Ivan, thanks for the question. We are reaffirming our outlook of JPY 200 billion. In Q1, we generated JPY 78 billion almost with some one-time impacts in there. If you take out those one-time impacts, the core business is delivering somewhere around JPY 30 or JPY 40 billion, that's despite the headwinds we're facing from the Middle East, as well as the raw materials. We're, in fact, able to price some of the raw material impact that hit us in Q1 already. A lot of that pricing is indeed in the USA. That goes to show we're improving our situation in the USA, and we're offsetting raw material. Plus, we've got the US tariffs.

Speaker #4: The core business is delivering somewhere around ¥30 billion or ¥40 billion, and so that's despite the headwinds we're facing from the Middle East as well as raw materials.

Speaker #4: And we're, in fact, able to price some of the raw material impact that hit us in the first quarter already. And a lot of that pricing is indeed in the USA.

Speaker #4: So that goes to show we're improving the situation in the USA, and we're offsetting raw materials. Plus, we've got the US tariffs. There's a program to continue to find opportunities in US content.

George Leondis: There's a program to continue to find opportunities in US content, we took some of those as one-time impacts in this quarter in relation to last year's US content, we've got more to come. Notwithstanding the issues we're facing in the Middle East, notwithstanding the issues we're facing with raw materials, we've got those opportunities plus FX, Forex at the current rates. Anything above JPY 150 is going to reap rewards for us. Even with the intervention that we've seen in the last couple of days, we're hovering at around JPY 156 to the USD. We feel confident that that's a reaffirmation of our outlook. Thank you.

Speaker #4: And we took some of those as one-time impacts in this quarter in relation to last year's U.S. content. But we've got more to come.

Speaker #4: So, notwithstanding the issues we're facing in the Middle East and the issues we're facing with raw materials, we've got those opportunities plus FX (foreign exchange) at the current rates.

Speaker #4: Anything above 150 yen is going to reap rewards for us. And even with the intervention that we've seen over the last couple of days, we're hovering at around 156 yen to the dollar.

Speaker #4: So, we feel confident that that's a reaffirmation of our outlook. Thank you.

Speaker #2: Thank you.

Lavanya Wadgaonkar: Thank you.

[Company Representative] (Yomiuri): Thank you.

Speaker #1: ありがとうございます。

Speaker #5: Okay, thank you. The second question, may I? You were talking about the US then. The US and Japan made a coordinated intervention to buy Japanese yen.

[Company Representative] (Yomiuri): Okay, thank you. The second question, may I? You were talking about that. US and Japan made a coordinated intervention to buy Japanese yen while there are uncertainties in the rate. How will this impact your performance or projection, and what is your assumption on Japanese and US dollars? If possible, this JPY 150, this was determined before the coordinated intervention, or did you adjust it after the intervention was made?

Operator: Okay, thank you. The second question, may I? You were talking about that. US and Japan made a coordinated intervention to buy Japanese yen while there are uncertainties in the rate. How will this impact your performance or projection, and what is your assumption on Japanese and US dollars? If possible, this JPY 150, this was determined before the coordinated intervention, or did you adjust it after the intervention was made?

Speaker #5: While there are uncertainties in the rate, how will this impact your performance or projection? And what is your assumption on Japanese yen and US dollars?

Speaker #5: And if possible, this 150 yen after buying before—was this determined before the coordinated intervention, or did you adjust it after the intervention was made?

Speaker #4: Yeah. Our outlook—I mean, we're constantly reviewing our outlook. We take it at a point in time. Obviously, we've been monitoring the forex. We saw the news, like you did, that there could have been intervention.

George Leondis: No. Our outlook, we're constantly reviewing our outlook. We take it at a point in time. Obviously, we've been monitoring the Forex. We saw the news like you did that there could have been intervention. In fact, we have done some partial hedging. We did early in the year for this financial year. We're confident that that hedging protects us on the downside, and we're able to make sure we're mitigating our risk if it falls below certain levels. That's one of the actions we took well prior to this intervention. At these current rates, we see opportunity into the outlook. On top, as I said, I reiterate, we've been taking pricing, and we believe that the market itself and our competitors will not stand still. They've shown already around the world the propensity to increase prices for the raw materials impact.

Speaker #4: In fact, we have done some partial hedging. We did it early in the year for this financial year, and we're confident that that hedging protects us on the downside.

Speaker #4: And we're able to make sure we're mitigating our risk if it falls below certain levels. So that's one of the actions we took well prior to this intervention.

Speaker #4: But at these current rates, we see opportunity in the outlook. And on top of that, as I said, I reiterate we've been taking pricing, and we believe that the market itself and our competitors will not stand still.

Speaker #4: They have already shown around the world the propensity to increase prices due to the impact of raw materials. So that's how we're managing this, and we feel confident the balance will give us that outlook.

George Leondis: That's how we're managing this, and we feel confident the balance will give us that outlook. Thank you.

Speaker #4: Thank you.

Speaker #2: Thank you. If you come to the middle row, first person in the second row.

Lavanya Wadgaonkar: Thank you. If you come to the middle row, first person in the second row.

Operator: Thank you. If you come to the middle row, first person in the second row.

Speaker #1: ありがとうございます。

[Company Representative] (Asahi Shimbun): Thank you. Asahi Shimbun, Yamashita speaking. I have two questions as well. Today, you talk about Re:Nissan progress. This Re:Nissan, you consolidated seven plants. Will there be further restructuring of the production footprint, especially Yokohama plant? This attracted a lot of attention in the past. What is your approach here?

Speaker #5: Thank you. Asahi Shimbun, Yamashita speaking. I have two questions as well. Today you talked about really some progress, and this really is you consolidated seven plans.

Speaker #5: Will there be further restructuring of the production footprint, especially the Yokohama plant? This attracted a lot of attention in the past. What is your approach here?

Speaker #3: Thank you. Yes, as we have said before, we don't have any additional restructuring actions in view at the moment. Regarding powertrain, as I have answered before, we are looking at our strategy for the future.

Iván Espinosa: Thank you. As we have said before, we don't have any restructuring additional actions in view at the moment. Regarding powertrain, as I have answered before, we are looking at our strategy for the future. It's very fluid because of what we see happening in different markets around the world. We just spoke about China with all these NEV shifts. In the US, we see heavy hybridization coming, and in Europe, we see acceleration of EV. It's very hard to define one single lane at the moment. We are looking at our strategy in detail, and we will share more details when we are ready to do so. Thank you. Thank you for the question.

Ivan Espinosa: Thank you. As we have said before, we don't have any restructuring additional actions in view at the moment. Regarding powertrain, as I have answered before, we are looking at our strategy for the future. It's very fluid because of what we see happening in different markets around the world. We just spoke about China with all these NEV shifts. In the US, we see heavy hybridization coming, and in Europe, we see acceleration of EV. It's very hard to define one single lane at the moment. We are looking at our strategy in detail, and we will share more details when we are ready to do so. Thank you. Thank you for the question.

Speaker #3: It's very fluid because of what we see happening in different markets around the world. We just spoke about China, with all these NEV shifts.

Speaker #3: In the US, we see heavy hybridization coming, and in Europe, we see an acceleration of EV. So, it's very hard to define one single lane at the moment.

Speaker #3: So, we are looking at our strategy in detail, and we will share more details when we are ready to do so. Thank you. Thank you for the question.

Speaker #1: 私の。

Speaker #5: I have another question. Honda. With Honda, you are talking about collaboration—STV. Collaboration, STV will be announced soon, at least that's what we understand, or at least Honda said, or Mibe-san said so.

[Company Representative] (Asahi Shimbun): I have another question. With Honda, you're talking about collaboration. SDV collaboration will be announced soon. At least that's what we understand, or at least Honda said, or Mibe-san said so. Where are you today with regards to this front?

Speaker #5: Where are you today with regard to this front?

Speaker #3: We are discussing a lot with Honda, as we have said before. It's different layers, starting with hardware, but also looking at what layers of the different software areas we can collaborate on.

Iván Espinosa: We are discussing a lot with Honda. As we have said before, it's different layers, starting with hardware, but also looking at what layers of the different software areas we can collaborate on. We don't have any further detail to announce today. We will come to you as soon as we are ready. Thank you for the question.

Ivan Espinosa: We are discussing a lot with Honda. As we have said before, it's different layers, starting with hardware, but also looking at what layers of the different software areas we can collaborate on. We don't have any further detail to announce today. We will come to you as soon as we are ready. Thank you for the question.

Speaker #3: We don't have any further details to announce today. We will come to you as soon as we are ready. Thank you for the question.

Speaker #2: Thank you. If I go to the second row on the last.

Lavanya Wadgaonkar: Thank you. If I go to the second row on the last.

Operator: Thank you. If I go to the second row on the last.

Speaker #1: ありがとうございます。

Speaker #5: Thank you. Toyo Keisai, Hata is speaking. I have two questions as well. Regarding the Middle East impact, what is the latest update on the impact from the Middle East?

[Company Representative] (Toyo Keizai): Thank you. Toyo Keizai, Hata is speaking. I have two questions, too. Talking about Middle East impact, what is the latest update on the impact on Middle East? In May, you said that JPY 15 billion will be a hit on operating profit because of logistics cost increase, raw material cost increase. What was the real impact in Q1, and is there any revision on the full year forecast of the impact on Middle East?

Speaker #5: Earlier, you said that ¥15 billion would be a hit on operating profit because of the largest cost increase, namely the increase in raw material costs. What was the real impact in Q1?

Speaker #5: And is there any revision on the full-year forecast of the impact of the Middle East?

Iván Espinosa: You want to take that one?

Ivan Espinosa: You want to take that one?

Speaker #4: Yeah, I can take that one. Thanks for the question. It's very important for us, this situation. And we have a task force that monitors it.

George Leondis: Yeah, I can take that one. Thanks for the question. It is very important for us, this situation, and we have a task force that monitors it. We are taking all sorts of mitigating actions, trying to ameliorate the impact on our business. Now, if you may recall, in the May announcement, we had projected at that time, despite the uncertainty, that we believed the impact on our business would be around 19,000 units deficit relating to the Middle East market alone in H1, and also an impact of around JPY 15 billion in H1. We were always projecting out H1 because of also a lot of actions we were taking to right-size production and in an attempt to reallocate vehicles as much as we could to other markets. Now, I will talk H1 again so you have that yardstick.

Speaker #4: And we are taking all sorts of mitigating actions, trying to ameliorate the impact on our business. Now, if you may recall, in the May announcement, we had projected at that time, despite the uncertainty, that we believed the impact on our business would be around a 19,000-unit deficit.

Speaker #4: Relating to the Middle East market alone, in the first half, there was also an impact of around ¥15 billion in the first half. We were always projecting out the first half because of a lot of actions we were taking to right-size production and in an attempt to reallocate vehicles as much as we could to other markets.

Speaker #4: Now, I will talk about the first half again, so you have that yardstick. In the first half of this year, we're expecting an impact of around ¥20 billion.

George Leondis: In the H1 this year, we are expecting an impact of around JPY 20 billion and on vehicle sales around 18,000 units. If you look back three or four months, we were pretty close to the forecast. Why the profit impact was a little bit higher, or is projected to be a little bit higher, is mostly because of logistics costs that have shown inflation to get cars into that region as we are competing with others. On top, we have lost some after-sales business, again due to logistics. In fact, on a positive note, we see the demand for Nissan vehicles is actually quite healthy and holding up in the market. The more cars we can get there, we can try to reduce the impact that I just mentioned. Thanks a lot. Thank you for the question.

Speaker #4: And on vehicle sales, around 18,000 units. So if you look back three or four months, we were pretty close to the forecast. And why the profit impact was a little bit higher, or is projected to be a little bit higher, is mostly because of logistics costs.

Speaker #4: That has shown inflation to get cars into that region as we're competing with others. And on top of that, we have lost some after-sales business, again, due to logistics.

Speaker #4: In fact, on a positive note, we see that demand for Nissan vehicles is actually quite healthy and is holding up in the market. So, the more cars we can get there, the more we can try to reduce the impact that I just mentioned.

Speaker #4: So, thanks a lot. Thank you for the question.

Speaker #1: ありがとうございます。

Speaker #5: Thank you. There's another thing. Another concern, which is Chinese business. Chinese business profitability of Chinese business in the past, one of the this used to be a cash cows, but because you have been seeing a loss making in the past, maybe the TIV is falling with intensified competition and price.

[Company Representative] (Toyo Keizai): Thank you. There is another thing, another concern, which is Chinese business. Profitability of Chinese business. In the past, this used to be a cash cow. Because we have been seeing a loss-making in the past, maybe the TIV is falling with intensified competition and price, and I am sure it is very difficult to boost volume in these circumstances.

Speaker #5: And I'm sure it's very difficult to boost the volume in these circumstances. Regarding the Chinese market, is there any visibility on making it profitable again? Or, in order to improve profitability in China, are there any additional actions that you are taking, such as restructuring the production footprint or reducing fixed costs?

[Company Representative] (Toyo Keizai): Chinese market, is there any visibility to make it profitable again? In order to improve the profitability in China, is there any additional action that you are taking, such as restructuring a production footprint or fixed cost reduction?

Speaker #4: Yeah, thanks for the question on China. I think Ivan mentioned it before, but I just want to emphasize and reiterate: the reduction of the China volumes and the impact that's going on in China due to the uncertain conditions does not necessarily impact, in a material sense, the operating profit of Nissan.

George Leondis: Yes. Thanks for the question on China. I think Yvonne mentioned it before, I just want to emphasize and reiterate. The reduction of the China volumes and the impact that is going on in China due to the uncertain conditions, that does not necessarily impact, in a material sense, the operating profit of Nissan on a consolidated basis. Okay. That is the first thing I will tell you. The second thing is that in the H1, under China GAAP, our business, our joint venture in China was actually break-even. Okay. We were not losing money in the H1, January to June. In Q1, we actually made a little bit of money on the operating profit. Where the business impacts Nissan consolidation is in the net income, because we equity account our 50% JV interest in DFL.

Speaker #4: On a consolidated basis—okay, that's the first thing I will tell you. The second thing is that in the first half, under China GAAP, our business—our joint venture in China—was actually break-even.

Speaker #4: Okay. So we were not losing money in the first half, January to June. And in the first quarter, we actually made a little bit of money on the operating profit.

Speaker #4: Now, where the business impacts Nissan consolidation is in the net income, because we equity account our JV at 50% JV interest in DFL. And on that, up to the end of the first quarter and indeed first half, we're not expecting a deviation to our original expectations on that.

George Leondis: On that, up to the end of Q1 and indeed H1, we're not expecting a deviation to our original expectations on that. We're monitoring closely now how this adjustment of volume, as we've announced, is going to impact the H2 of the net income of the China JV. It's within our projection of net income that I mentioned before, JPY 20 billion, is including that adjustment regarding the equity interest that we have in the joint venture. Why are we still confident we can do that? Because as Yvonne mentioned, there's a lot of countermeasures in place. I won't reiterate because I'll end up requoting him.

Speaker #4: And we're monitoring closely now how this adjustment of volume, as we've announced, is going to impact the second half of the net income of the China JV.

Speaker #4: And it's within our projection of net income that I mentioned before—¥20 billion—including that adjustment regarding the equity interest that we have in the joint venture.

Speaker #4: Why are we still confident we can do that? Because, as Ivan mentioned, there are a lot of countermeasures in place. I won't reiterate because I'll end up requoting him.

Speaker #4: But there's a lot going on where our teams are leading initiatives to ensure that we try and ameliorate as much as we can that adverse impact, not only on the Chinese profitability, but on the net income of Nissan Motor consolidated.

George Leondis: There's a lot going on where our teams are leading initiatives to ensure that we try and ameliorate as much as we can that adverse impact, not only on the Chinese profitability, but on the net income of Nissan Motor consolidated. Is that okay? That answers your question? Yeah. Thank you.

Speaker #4: Is that okay? Does that answer your question? Yeah. Thank you.

Speaker #2: Thank you. Can you come to the middle row, third seat, please?

Lavanya Wadgaonkar: Thank you. Can you come to the middle row, third row, please?

Operator: Thank you. Can you come to the middle row, third row, please?

Speaker #3: Thank you.

[Company Representative] (Sankei Newspaper): Sankei Shimbun Ikeda. Ikeda, Sankei Newspaper. European business is the subject of my question. Operating gain and losses. Operating losses continue to be booked. What's the backdrop of losses in Europe? Structural reform is not making progress, is that the reason? Sunderland production system has been reviewed, and is that going to have a positive impact to the outlook of profitability?

Speaker #1: Ikeda, something newspaper.

Speaker #5: European business is the subject of my question. Operating gains and losses—operating losses continue to be booked. What’s the backdrop of losses in Europe?

Speaker #5: Structural reform is not making progress. Is that the reason? Or has the Sunderland production system been reviewed, and is that going to have a positive impact on the outlook of profitability?

Speaker #3: You can hear me, right? I didn't knock out the mic. So yeah, I guess you might have seen—thank you—you might have seen the Tension document, and you're referencing that question to the Tension document.

George Leondis: You can hear me, right?

Iván Espinosa: Yeah.

Ivan Espinosa: Yeah.

George Leondis: I didn't have the other mics. Yeah, I guess you might have seen Thank you. You might have seen the Tanshin document, you're referencing that question to the Tanshin document. The losses, in fact, that you see in that document are pretty flat from one year to the next. The European business is obviously facing competitive pressure at the moment, the influx of, in particular, Chinese competition. The bright sparks for our business are that we are launching and progressively ramping up the production of LEAF. It's the same LEAF that is available in Japan that's being launched in Europe this year. We've launched the Micra, it's going very well in the marketplace, these two cars are hitting the sweet spot in terms of the TIV, which is growing. That's the first thing. The second thing is we have announced restructuring in Europe.

Speaker #3: And the losses, in fact, that you see in that document are pretty flat from one year to the next. And the European business is obviously facing competitive pressure at the moment.

Speaker #3: And the influx of, in particular, Chinese competition. The bright spots for our business are that we are launching and progressively ramping up the production of Leaf.

Speaker #3: It's the same Leaf that is available in Japan that's being launched in Europe this year. We've launched the Micra, and it's going very well in the marketplace.

Speaker #3: And these two cars are hitting the sweet spot in terms of the TIV, which is growing. That's the first thing. The second thing is, we have announced restructuring in Europe.

Speaker #3: There are two initiatives going on. We are right-sizing the footprint of the business to ensure that we can reduce the break-even point of the business to a lower level than it is today.

George Leondis: There's two initiatives going on. We are rightsizing the footprint of the business to ensure that we can reduce the break-even point of the business to a lower level than it is today. On top, we are discussing, that we publicly announced, we're discussing with another OEM, in fact, Chery. We're discussing a contract manufacturing opportunity in Sunderland to absorb some of the capacity that we have there. It's a very efficient plant. It's very efficient compared to other European players. It has a highly motivated and highly skilled workforce, that's the attraction that obviously other third parties have. That particular initiative can continue to drive down cost per unit and increase the utilization ratio of that plant. Combined with the new models we're launching and the restructuring, we're aiming to deliver, in the future, a better performance and return to profitability in the European market.

Speaker #3: And on top of that, we are discussing—having publicly announced—that we're in discussions with another OEM. In fact, with Cherry, we're discussing a contract manufacturing opportunity in Sunderland.

Speaker #3: To absorb some of the capacity that we have there, it's a very efficient plant. It's very efficient compared to other European players. It has a highly motivated and highly skilled workforce.

Speaker #3: And that's the attraction that, obviously, other third parties have. That particular initiative can continue to drive down the cost per unit and increase the utilization ratio of that plant.

Speaker #3: And combined with the new models we're launching, and the restructuring we're aiming to deliver, in the future, we expect better performance and a return to profitability in the European market.

Speaker #3: I'm not sure, Ivan, if I've said it. No, I think it was clear. Maybe—I don't know if that answered your question, Ikeda.

George Leondis: I'm not sure, Yvonne, if I've covered anything.

George Leondis: I'm not sure, Ivan, if I've covered anything.

Iván Espinosa: No, I think it was clear. Maybe, I don't know if that answered your question, Ikeda-san.

Ivan Espinosa: No, I think it was clear. Maybe, I don't know if that answered your question, Ikeda-san.

Speaker #5: I have a related follow-up question. What about the competition against Chinese manufacturers in Europe? From Nissan's Chinese plans, are you planning to export from your Chinese plants to Europe?

[Company Representative] (Sankei Newspaper): I have a related follow-up question. What about the competition against Chinese manufacturers in Europe?

[Company Representative] (Sankei Newspaper): I have a related follow-up question. What about the competition against Chinese manufacturers in Europe? From Nissan's Chinese plants, are you planning to export from your Chinese plants to Europe? Is that an option? What about your co-working with Renault? Are you planning to use that in order to strengthen your product lineup? Thank you.

[Company Representative] (Sankei Newspaper): From Nissan's Chinese plants, are you planning to export from your Chinese plants to Europe? Is that an option? What about your co-working with Renault? Are you planning to use that in order to strengthen your product lineup? Thank you.

Speaker #5: Is that an option? And what about your co-working with Renault? Are you planning to use that in order to strengthen your product lineup? Thank you.

Speaker #4: And the two answers are yes. So we are looking at every single opportunity, Ikeda. We have product built in China that could be marketed in Europe in the future.

Iván Espinosa: The two answers are yes. We are looking at every single opportunity, Ikeda-san. We have product built in China that could be marketed in Europe in the future. Yes, this is one opportunity. Of course, we will continue working with our partner, Renault. The products that we are getting from them are proving to be successful. We started the Micra a few months ago, and it's gaining a lot of good traction. It's very well-received. Conversely, we also launched the Tekna in India, and it's also getting very good reviews. We will continue working with them. At the same time, as I said, we have products built in China that we could utilize. As I've said before, the objective of exporting cars from China is to defend ourselves from the Chinese in the short term.

Ivan Espinosa: The two answers are yes. We are looking at every single opportunity, Ikeda-san. We have product built in China that could be marketed in Europe in the future. Yes, this is one opportunity. Of course, we will continue working with our partner, Renault. The products that we are getting from them are proving to be successful. We started the Micra a few months ago, and it's gaining a lot of good traction. It's very well-received. Conversely, we also launched the Tekna in India, and it's also getting very good reviews. We will continue working with them. At the same time, as I said, we have products built in China that we could utilize. As I've said before, the objective of exporting cars from China is to defend ourselves from the Chinese in the short term.

Speaker #4: So yes, this is one opportunity. And of course, we will continue working with our partner Renault. The products that we are getting from them are proving to be successful.

Speaker #4: We started the Micro a few months ago, and it's gaining a lot of good traction. It's very well received. Conversely, we also launched the Tecton in India.

Speaker #4: And it's also getting very good reviews, so we will continue working with them. At the same time, as I said, we have products built in China that we could utilize.

Speaker #4: As I've said before, the objective of exporting cars from China is to defend ourselves from the Chinese in the short term. And, in the short term, this is something that we could potentially do.

Iván Espinosa: In the short term, this is something that we could potentially do. In the mid, long term, of course, there's a heavier transformation that has to happen in order for us to be defending ourselves in front of Chinese players. This is what we are working in parallel as well. This is what I can tell you about that one, Ikeda-san. Thank you for the question.

Ivan Espinosa: In the short term, this is something that we could potentially do. In the mid, long term, of course, there's a heavier transformation that has to happen in order for us to be defending ourselves in front of Chinese players. This is what we are working in parallel as well. This is what I can tell you about that one, Ikeda-san. Thank you for the question.

Speaker #4: In the mid to long term, of course, there's a heavier transformation that has to happen in order for us to be defending ourselves in front of Chinese players.

Speaker #4: And this is what we're working on in parallel as well. So, this is what I can tell you about that one, Ikeda. Thank you for the question.

Speaker #2: Thank you. Let me go to the gentleman over there. Yeah.

Lavanya Wadgaonkar: Thank you. Let me go to the gentleman over there. Yeah.

Operator: Thank you. Let me go to the gentleman over there. Yeah.

Speaker #5: Thank you. My name is Nakamura. I have a couple of questions. The first one is for Ivan-san. Regarding Nissan, how do you assess Nissan as of today?

[Company Representative] (Nikkan Jidosha Shimbun): Thank you. Nikkan Jidosha Shimbun. My name is Nakamura. I have a couple of questions. First one is for Ivan-san. Re:Nissan, how do you assess Re:Nissan as of today, and what is the projection going forward? So far, JPY 355 billion of improvements in costs were made. Having said that, JPY 500 billion is full year objective, you need to do more. How do you assess the current status? In order to reach JPY 500 billion, is there any challenges that you need to overcome? This is my first question for Ivan-san.

Speaker #5: And what is the projection going forward? So far, ¥355 billion of improvements in costs were made. Having said that, ¥500 billion is the full-year objective.

Speaker #5: So you need to do more. So, how do you assess the current status in order to reach 500 billion yen? Are there any challenges that you need to overcome?

Speaker #5: This is my first question for Ivan's son.

Speaker #3: Thank you. So, yeah, I think the performance is showing the resilience and the dedication of our teams. We are ahead of plan in several areas of cost transformation.

Iván Espinosa: Thank you. Yeah, I think the performance is showing the resilience and the dedication of our teams. We are ahead of plan in several areas of a cost transformation. One example is our engineering average cost per hour. We gave ourselves a target of achieving a 20% reduction by the end of the program, and we have achieved that already three quarters ahead. This is showing you the determination and the focus that the teams have on the program. We will continue because we should not stop. If there's further opportunities, we will continue pushing to have a lower breakeven point. The work is on the top line, continue to deliver good revenue. As long as we do the two things, the company's profitability will be structurally healthy and sustainable. This is what we are working on, Nakamura-san.

Ivan Espinosa: Thank you. Yeah, I think the performance is showing the resilience and the dedication of our teams. We are ahead of plan in several areas of a cost transformation. One example is our engineering average cost per hour. We gave ourselves a target of achieving a 20% reduction by the end of the program, and we have achieved that already three quarters ahead. This is showing you the determination and the focus that the teams have on the program. We will continue because we should not stop. If there's further opportunities, we will continue pushing to have a lower breakeven point. The work is on the top line, continue to deliver good revenue. As long as we do the two things, the company's profitability will be structurally healthy and sustainable. This is what we are working on, Nakamura-san.

Speaker #3: One example is our engineering average cost per hour. We set ourselves a target of achieving a 20% reduction by the end of the program.

Speaker #3: And we have achieved that already, three quarters ahead. So this shows you the determination and focus that the teams have on the program.

Speaker #3: So we will continue because we should not stop. If there are further opportunities, we will continue pushing to have a lower break-even point. And then the work is on the top line.

Speaker #3: So, continue to deliver good revenue. And so, as long as we do these two things, the company's profitability will be structurally healthy and sustainable.

Speaker #3: This is what we are working on, Nakamura-san.

Speaker #5: Okay, thank you. There's another one in relation to what I said. The other day, when you talked about the long-term vision, you didn't mention specific financial objectives.

[Company Representative] (Nikkan Jidosha Shimbun): Okay. Thank you. There's another one in relation to what I said the other day. When you talk about long-term vision, you didn't talk about specific financial objectives, and you said that you're going to announce it at a later date. When are you going to announce the concrete numbers? What will be the timing? What kind of target will be announced about long-term vision? You didn't give any financials last time.

Speaker #5: And you said that you're going to announce it at a later date. When are you going to announce the concrete numbers? What will be the timing?

Speaker #5: What kind of target will be announced about the long-term vision? You didn't give any financials last time.

Speaker #3: Yes, we are working on that. As I said before, we expect to come out in the second half of this fiscal year.

Iván Espinosa: Yeah, we are working on that. As I said before, we are expecting to come out in the H2 of this fiscal year. We will let you know as soon the date is confirmed. They will be in the H2 of this fiscal year, Nakamura-san. Thank you.

Ivan Espinosa: Yeah, we are working on that. As I said before, we are expecting to come out in the H2 of this fiscal year. We will let you know as soon the date is confirmed. They will be in the H2 of this fiscal year, Nakamura-san. Thank you.

Speaker #3: We will let you know as soon as the date is confirmed. But it will be in the second half of this fiscal year, Nakamura-san. Thank you.

Speaker #2: Thank you. If I can go to the gentleman in the third row, first question—yeah.

Lavanya Wadgaonkar: Thank you. If I go to the gentleman on the third row. First person. Yes.

Operator: Thank you. If I go to the gentleman on the third row. First person. Yes.

Speaker #3: Thank you. I'm Tsuyoshi Inazuma from Bloomberg News. I have two questions. Regarding the full exchange hedging you mentioned earlier, what specific measures have been taken?

Tsuyoshi Inajima: Thank you. I'm Tsuyoshi Inajima from Bloomberg News. I have two questions. Regarding the foreign exchange hedging you mentioned earlier, what specific measures have been taken? Could you share the details to the extent possible? Second question is regarding the risks and the opportunity chart on page 13. I'd like to know the detailed figures for each item, including the Middle East impact. That's it. Thank you.

Speaker #3: Could you share the details to the extent possible? Second question is regarding the risks and opportunity chart on page 13. I'd like to know the detailed figures for each item, including the Middle East impacts.

Speaker #3: That's it. Thank you.

Speaker #4: Thank you. So, as for the details on the RNOs, the situation is quite fluid. What we can tell you today is that we see this balancing off.

Iván Espinosa: Thank you. As for the details on the RNOs, the situation is quite fluid. What we can tell you today is that we see this balancing off. We see the risks coming more closely to the size of opportunities that we have at hand. We are not giving details because the situation is very fluid, both in terms of Forex raw material and the Middle East situation. We are rather focusing on bringing as many opportunities as possible to offset those risks that are beyond our control. This is what we are working on. Unfortunately, no detail to give you other than what we see today. The assessment is that they are very balanced. As for hedging on Forex, I'm sorry, we will not disclose the details of that. I'm assuming you can easily understand.

Ivan Espinosa: Thank you. As for the details on the RNOs, the situation is quite fluid. What we can tell you today is that we see this balancing off. We see the risks coming more closely to the size of opportunities that we have at hand. We are not giving details because the situation is very fluid, both in terms of Forex raw material and the Middle East situation. We are rather focusing on bringing as many opportunities as possible to offset those risks that are beyond our control. This is what we are working on. Unfortunately, no detail to give you other than what we see today. The assessment is that they are very balanced. As for hedging on Forex, I'm sorry, we will not disclose the details of that. I'm assuming you can easily understand.

Speaker #4: So we see the risks coming more closely to the size of the opportunity that we have at hand. We are not giving details because the situation is very fluid, both in terms of forex, raw material, and the Middle East situation.

Speaker #4: And we are rather focusing on bringing as many opportunities as possible to offset those risks that are beyond our control. So, this is what we are working on.

Speaker #4: So unfortunately, no detail to give you other than what we see today. The assessment is that they are very, very balanced. As for hedging on Forex, I'm sorry, but we would not disclose the details of that.

Speaker #4: I'm assuming you can easily understand, but maybe George can make some comments to the extent possible. It's complicated to give that sort of information.

Iván Espinosa: Maybe George can make some comments to the extent possible. It's complicated to give that sort of information. What we can tell you is we are in good position with this. It's going to help us protect to further risks on the eventuality of a further strengthening of the yen. It was timely, and it's working in the way we expected it to work. That's what we can tell. Yeah. Thank you for that.

Ivan Espinosa: Maybe George can make some comments to the extent possible. It's complicated to give that sort of information. What we can tell you is we are in good position with this. It's going to help us protect to further risks on the eventuality of a further strengthening of the yen. It was timely, and it's working in the way we expected it to work. That's what we can tell. Yeah. Thank you for that.

Speaker #4: What we can tell you is we are in a good position with this. It's going to help us protect against further risks in the event of further strengthening of the yen.

Speaker #4: It was timely, and it's working in the way we expected it to work. So that's what we can tell. Yeah. Thank you for that.

Speaker #2: Thank you. If you could come to the gentleman in the first row, please.

Lavanya Wadgaonkar: Thank you. If you come to the gentleman in the first row, please.

Operator: Thank you. If you come to the gentleman in the first row, please.

Speaker #5: Diamond. My name is Yamamoto. I have two questions as well. The first question is about the Chinese business projection. I want details. Earlier, as Minosa-san said in the letter, the second half of the year, things will be better.

[Company Representative] (Diamond): Diamond. My name is Yamamoto. I have two questions as well. The first question is about Chinese business projection. I want details. Earlier, Asminosa-san, you said that in the letter, the second half of the year, things will be better. Specifically, what makes you think that it'll be better in the second half of the year? Because between April-June, looking at the volume, NX8 was introduced, but yet it declined by 30%, which was very challenging indeed. For what reason do you think things will be better in the second half of the year? First question, please.

Speaker #5: Specifically, what makes you think that it'll be better in the second half of the year? Because between April and June, looking at the volume, NX8 was introduced, but yet it declined by 30%, which was very challenging.

Speaker #5: Indeed. So, for what reason do you think things will be better in the second half of the year? First question, please.

Speaker #3: We said earlier, there are two phenomena happening, Yamamoto-san. One is that the economy has slowed down, so there was a natural contraction in the TIV. But the second is that there has been a big shift from ICE to NEV.

Iván Espinosa: As we said earlier, there is two phenomenon happening, Koyo-san. One is the economy is low down, so there was a natural contraction on the TIV. The second one is there was a big shift from ICE to NEV, and there's not enough product on the ground to satisfy this demand. The reason why we believe there will be a growth, and I would say a prudent growth on the TIV in the H2, and more specifically probably around Q4, is because that's the timing at which we see the supply chain shifting into NEV. This is the normal timing that it takes in between you start producing a car, it gets distributed, and you get the ability to have it on the ground. That's what we see. It's two things.

Ivan Espinosa: As we said earlier, there is two phenomenon happening, Koyo-san. One is the economy is low down, so there was a natural contraction on the TIV. The second one is there was a big shift from ICE to NEV, and there's not enough product on the ground to satisfy this demand. The reason why we believe there will be a growth, and I would say a prudent growth on the TIV in the H2, and more specifically probably around Q4, is because that's the timing at which we see the supply chain shifting into NEV. This is the normal timing that it takes in between you start producing a car, it gets distributed, and you get the ability to have it on the ground. That's what we see. It's two things.

Speaker #3: And there's not enough product on the ground to satisfy these demands. So, the reason why we believe there will be growth—and I would say a prudent growth—on the TIV in the second half.

Speaker #3: And more specifically, probably around quarter four, is because that's the timing at which we see the supply chain shifting into NEV. This is the normal timing that it takes in between when you start producing a car, it gets distributed, and you get the ability to have it on the ground.

Speaker #3: So that's what we see. So it's two things. One, there will probably still be a contraction in terms of TIV versus previous market sizes.

Iván Espinosa: One, probably there will be still a contraction in terms of TIV versus the previous market sizes. We see that the contraction that we see today will be less so because we will have more NEV in the market to satisfy the requirements of the Chinese customers, which is what they are demanding. There is a lot of demand for NEV product as we speak. That's the reasoning behind, Koyo-san.

Ivan Espinosa: One, probably there will be still a contraction in terms of TIV versus the previous market sizes. We see that the contraction that we see today will be less so because we will have more NEV in the market to satisfy the requirements of the Chinese customers, which is what they are demanding. There is a lot of demand for NEV product as we speak. That's the reasoning behind, Koyo-san.

Speaker #3: But we see that the contraction that we see today will be less so, because we will have more NEVs in the market to satisfy the requirements of the Chinese customers, which is what they are demanding.

Speaker #3: There's a lot of demand for NEV products as we speak. So that's the reasoning behind it, Yamamoto-san.

Speaker #5: Okay, thank you very much. Second question, which is about free cash flow—FCF, automotive free cash flow at Nissan. Along with operating profit, you are focusing a lot on free cash flow.

[Company Representative] (Diamond): Okay. Thank you very much. Second question, which is about free cash flow, FCF. Automotive free cash flow in Nissan, along with operating profit, you are focusing a lot on free cash flow. In Q1, you came to JPY -324 billion, which is almost even against the prior year. For this fiscal year, what will happen to the automotive free cash flow? What will be the level that you are projecting?

Speaker #5: In the first quarter, you came to negative ¥324 billion, which is almost even against the prior year. For this fiscal year, what will happen to the automotive free cash flow?

Speaker #5: What level are you projecting?

Speaker #3: Yeah, thanks. That's a good question. And, obviously, free cash flow for us is a top priority. For the full year, again, I will cast back to the May announcement, where I believe I said that our automotive free cash flow, which we're aiming for this year and believe we can achieve, is going to be positive excluding the cash impact of tariffs.

George Leondis: Yeah, thanks. That's a good question, and obviously, free cash flow for us is a top priority. For the full year, again, I will cast back to the May announcement where I believe I said that our automotive free cash flow we're aiming for this year, and we believe we can achieve, is going to be positive, excluding the cash impact of tariffs. Okay? That's what I believe I said back in May, and I'm holding to that position. That's the first thing. I also think that based on our profile of our business, where we are expecting a quarter-over-quarter improvement in our business, and we have a seasonal, let's say, dip in the Q1 and we tend to generate higher cash flows in the back end of the year.

Speaker #3: Okay. So that's what I believe I said back in May. And I'm holding to that position. That's the first thing. I also think that based on our profile of our business, where we have a expecting a quarter over quarter improvement in our business, and we have a seasonal let's say dip in the first quarter, and we tend to generate higher cash flows in the back end of the year, I think that's going to be giving us that tailwind that will then give me the backup for my assertion that we will be positive free cash flow excluding tariffs for the full fiscal year.

George Leondis: I think that's going to be giving us that tailwind that will then give me the backup for my assertion that we will be positive free cash flow, excluding tariffs, for the full fiscal year. I also said, and I'm sticking to it, that based on everything we are doing, including the cost reduction initiatives, that a lot of these will come in the H2 of the year. The growth of our business in the H2 of the year, including with the introduction of e-POWER hybrid in the US, the profile of our free cash flow will be much stronger in that H2. We're tending to rely less on asset sales. We do have opportunities in asset sales that we're working on as well, which will help to underpin that free cash flow.

Speaker #3: And I also said, and I'm sticking to it, that based on everything we are doing, including the cost reduction initiatives—many of which will come in the second half of the year—the growth of our business in the second half of the year, including with the introduction of e-POWER Hybrid in the US, the profile of our free cash flow will be much stronger in that second half.

Speaker #3: And we're tending to rely less on asset sales, but we do have opportunities in asset sales that we're working on as well, which will help to underpin that free cash flow.

Speaker #3: I reiterate also that our net cash is in a very healthy position—almost ¥1 trillion. And our gross cash facilities were in excess of ¥2 trillion at the end of June.

George Leondis: I reiterate also that our net cash is very healthy position, almost JPY 1 trillion, our gross cash facilities are in excess of JPY 2 trillion at the end of June.

Speaker #4: Yeah. And maybe one precision, Yamamoto-san, because you said that our cash free cash flow was almost even versus last year. George was explaining during his presentation that we had one time last year, one time gains of around 50 billion.

Iván Espinosa: Yeah. Maybe one precision, Koyo-san, because you said that our free cash flow was almost even versus last year. George was explaining during his presentation that we had one time last year, one time gains of around JPY 50 billion. The actual comparable number is JPY 440 to JPY 320. There's an improvement of over JPY 100 billion year-over-year for the quarter.

Ivan Espinosa: Yeah. Maybe one precision, Koyo-san, because you said that our free cash flow was almost even versus last year. George was explaining during his presentation that we had one time last year, one time gains of around JPY 50 billion. The actual comparable number is JPY 440 to JPY 320. There's an improvement of over JPY 100 billion year-over-year for the quarter.

Speaker #4: So the actual comparable number is 440 to 320. So there's an improvement of over ¥100 billion year over year for the quarter.

Speaker #2: Thank you. If you could give the microphone to the lady in the first row. Kyodo.

Lavanya Wadgaonkar: Thank you. We come to the lady in the first row.

Operator: Thank you. We come to the lady in the first row.

Speaker #5: Kyodo Tsushin. My name is Koshika. Thank you very much. I would like to ask you about the impact of the Kumamoto earthquake. NISSAN subsidiaries planned—this wasn't damage.

[Company Representative] (Kyodo Tsushin): Kyodo News. My name is Koshika. Thank you very much. Kumamoto earthquake impact is what I would like to ask you about. Nissan subsidiaries plant, this wasn't damaged. That's what I heard. Partially, you are suspending the production operation. I think there is a supply chain issue that was revealed. 10 years ago, there was one earthquake in Kumamoto. At that time, what kind of action did you take to prevent yourself? These actions are still effective today? Once again, what are the new challenges that are revealed, and what are the necessary action to address them?

[Company Representative] (Kyodo News): Kyodo News. My name is Koshika. Thank you very much. Kumamoto earthquake impact is what I would like to ask you about. Nissan subsidiaries plant, this wasn't damaged. That's what I heard. Partially, you are suspending the production operation. I think there is a supply chain issue that was revealed. 10 years ago, there was one earthquake in Kumamoto. At that time, what kind of action did you take to prevent yourself? These actions are still effective today? Once again, what are the new challenges that are revealed, and what are the necessary action to address them?

Speaker #5: That's what I heard. But partially, you are suspending the production operation, so I think there is a supply chain issue that was revealed. Ten years ago, there was one earthquake in Kumamoto.

Speaker #5: At that time, what kind of action did you take to prevent yourself? And are these actions still effective today? Once again, what are the new challenges that have been revealed, and what are the necessary actions to address them?

Speaker #3: So thankfully, as you said, first of all, there were no human losses, either for Nissan or our distributor partners there. This is, first of all, the most important thing for us, as we care about people first and foremost.

Iván Espinosa: Question. Thankfully, as you said, there were, first of all, no human losses, both for Nissan or our distributor partners there. This is first of all, the most important thing for us as we are caring about people first and foremost. That's the best news of everything that has happened. Secondly, we see, of course, some impact, not in our facilities. We didn't have any disruption in our own facilities, neither on those of our distributor partners. We do have some impact in the supply chain. As I was saying earlier, we have partial stops in some of the lines. Not all of the lines will be stopped, but some of the lines will be stopped partially this week. So far, the impact we see is around 5,000 units that we're still checking how and when we can recover.

Ivan Espinosa: Question. Thankfully, as you said, there were, first of all, no human losses, both for Nissan or our distributor partners there. This is first of all, the most important thing for us as we are caring about people first and foremost. That's the best news of everything that has happened. Secondly, we see, of course, some impact, not in our facilities. We didn't have any disruption in our own facilities, neither on those of our distributor partners. We do have some impact in the supply chain. As I was saying earlier, we have partial stops in some of the lines. Not all of the lines will be stopped, but some of the lines will be stopped partially this week. So far, the impact we see is around 5,000 units that we're still checking how and when we can recover.

Speaker #3: So that's the best news of everything that has happened. Secondly, we see, of course, some impact—not in our facilities. We didn't have any disruption in our own facilities.

Speaker #3: Neither on those of our distributor partners. But we do have some impact in the supply chain. That's why, as I was saying earlier, we have partial stops in some of the lines.

Speaker #3: Not all of the lines will be stopped, but some of the lines will be stopped partially this week. So far, the impact we see is around 5,000 units, and we're still checking how and when we can recover.

Speaker #3: As for the learnings, of course, we have unfortunately gained a lot of experience through this crisis in the past, and we are putting the same protocols in place.

Iván Espinosa: As for the learnings, of course, we have unfortunately gained a lot of experience through this crisis in the past, we are putting the same protocols in place. We have a very strong manufacturing Monozukuri team and supply chain team, together with our purchasing teams, visiting the suppliers and making sure that we're providing the right support and again, taking care of people first, then, of course, trying to normalize the operations as soon as possible. This is what I can tell you today, Kushika San.

Ivan Espinosa: As for the learnings, of course, we have unfortunately gained a lot of experience through this crisis in the past, we are putting the same protocols in place. We have a very strong manufacturing Monozukuri team and supply chain team, together with our purchasing teams, visiting the suppliers and making sure that we're providing the right support and again, taking care of people first, then, of course, trying to normalize the operations as soon as possible. This is what I can tell you today, Koshika.

Speaker #3: We have a very strong manufacturing monozukuri team, and our supply chain team, together with our purchasing teams, is visiting the suppliers and making sure that we're providing the right support.

Speaker #3: And again, taking care of people first, then of course trying to normalize the operations as soon as possible. This is what I can tell you today, Koshika-san.

Speaker #2: Thank you.

Lavanya Wadgaonkar: Thank you.

Operator: Thank you.

Speaker #5: Another one. May I ask you another question? Just to make sure about what you said just now. Originally, until the 5th of August, you are going to suspend production for some of the lines.

[Company Representative] (Kyodo Tsushin): Another one. May I ask you another question? Just to make sure about what you said just now. Originally, until 5 August, you are going to suspend the production for some of the lines. This will be extended until 7 August of this week. This is my first part of question. 5,000 units of the impact that you gave. From last year up to 7 August, if you suspend the operation until 7 August, 5,000 units will be the impact that you are foreseeing?

[Company Representative] (Kyodo News): Another one. May I ask you another question? Just to make sure about what you said just now. Originally, until 5 August, you are going to suspend the production for some of the lines. This will be extended until 7 August of this week. This is my first part of question. 5,000 units of the impact that you gave. From last year up to 7 August, if you suspend the operation until 7 August, 5,000 units will be the impact that you are foreseeing?

Speaker #5: This will be extended until August 7th of this week. That is the first part of my question. And, regarding the 5,000 units of impact that you gave...

Speaker #5: From last year up to August 7th, if you suspend the operation until August 7th, 5,000 units will be the impact that you are foreseeing.

Speaker #3: What we are confirming is that we have these disruptions until August 5th. As I said, it's partial; not all lines are stopping.

Iván Espinosa: What we are confirming is that we have these disruptions until 5 August, and as I said, it's partial. Not all lines are stopping. We will provide further information as soon as it becomes available, Kushika San. Thank you.

Ivan Espinosa: What we are confirming is that we have these disruptions until 5 August, and as I said, it's partial. Not all lines are stopping. We will provide further information as soon as it becomes available, Koshika. Thank you.

Speaker #3: And we will provide further information as soon as it becomes available, Koshika-san. Thank you.

Speaker #2: Thank you. We have time for one last question. If I could go to the gentleman behind.

Lavanya Wadgaonkar: Thank you. We have time for one last question if I go to the gentleman behind.

Operator: Thank you. We have time for one last question if I go to the gentleman behind.

[Company Representative] (NHK Radio): Hatanaka, NHK. I'm with NHK Radio. First question, I have a related question to the previous one, impact of the supply chain. Specifically, what kind of components are in short? That's my first question.

Speaker #1: Hatanaka, NHK. I'm with NHK Radio. First question: I have a related question to the previous one, regarding the impact of the supply chain. Specifically, what kinds of components are in short supply?

Speaker #1: That's my first question.

Speaker #3: I'm not sharing the detail today, as I said. The impact is 5,000 units, and we will have these disruptions until August 5th. We will continue sharing information as it becomes available.

Iván Espinosa: Not sharing the detail today. As I said, the impact is 5,000 units, and we have this disruption until 5 August. We will continue sharing information as it becomes available. Yeah.

Ivan Espinosa: Not sharing the detail today. As I said, the impact is 5,000 units, and we have this disruption until 5 August. We will continue sharing information as it becomes available. Yeah.

Speaker #1: Thank you very much. I have another question. Last month, a Chinese manufacturer announced a Kei car. In the EV market and the Kei domestic market, what kind of impact will there be from this Japanese-Chinese manufacturer?

[Company Representative] (NHK Radio): Thank you very much. I have another question. Last month, a Chinese manufacturer announced a kei car. In the EV market and the kei domestic market, what kind of impact will there be from this Chinese manufacturer? Does Nissan plan to take any specific countermeasures against such challenges?

Speaker #1: And does Nissan plan to take any specific countermeasures against such challenges?

Speaker #3: So, of course, the Chinese OEMs are a serious threat everywhere in the world. And as I was saying earlier, it will require a strong transformation.

Iván Espinosa: Of course, the Chinese OEMs are a serious threat everywhere in the world. As I was saying earlier, it will require a strong transformation. This is why we're doing what we're doing today. Today with Re-Nissan, we're laying the foundation to be a more resilient and competitive company. We will continue building on that in order to make a strong foundation to fight the very aggressive Chinese OEMs. This is what I can tell you. It's very important in every single market around the world that we transform ourselves. We become more resilient and stronger in order to fight with the aggressive Chinese OEMs. Thank you for the question.

Ivan Espinosa: Of course, the Chinese OEMs are a serious threat everywhere in the world. As I was saying earlier, it will require a strong transformation. This is why we're doing what we're doing today. Today with Re-Nissan, we're laying the foundation to be a more resilient and competitive company. We will continue building on that in order to make a strong foundation to fight the very aggressive Chinese OEMs. This is what I can tell you. It's very important in every single market around the world that we transform ourselves. We become more resilient and stronger in order to fight with the aggressive Chinese OEMs. Thank you for the question.

Speaker #3: This is why we're doing what we're doing today. So today, with Nissan, we're laying the foundation to be a more resilient and competitive company.

Speaker #3: And we will continue building on that in order to make a strong foundation to fight the very aggressive Chinese OEMs. This is what I can tell you.

Speaker #3: So it's very important in every single market around the world that we transform ourselves and become more resilient and stronger in order to compete with the aggressive Chinese OEMs.

Speaker #3: Thank you for the question.

Speaker #2: I can accommodate one short question. Short.

Lavanya Wadgaonkar: I can accommodate one short question. Short.

Operator: I can accommodate one short question. Short.

Speaker #4: Thank you very much. Daniel Locing from Reuters. I just want to take it back a little bit to the US market, because you're preparing for the launch of the e-Power Rogue. How important is that launch going to be for the company this year, especially financially?

Daniel Loesing: Thank you very much. Daniel Loesing from Reuters. I just want to take it back a little bit to the US market, because you're preparing for the launch of the e-POWER Rogue. How important is that launch going to be for the company this year, especially financially? Say the launch would be a success, would that be a reason for potentially upgrading the operating profit forecast for the whole year?

Daniel Leussink: Thank you very much. Daniel Leussink from Reuters. I just want to take it back a little bit to the US market, because you're preparing for the launch of the e-POWER Rogue. How important is that launch going to be for the company this year, especially financially? Say the launch would be a success, would that be a reason for potentially upgrading the operating profit forecast for the whole year?

Speaker #4: And say the launch would be a success. Would that be a reason for potentially upgrading the operating profit forecast for the whole year?

Speaker #3: Well, whether it's important or not—of course, it's important. I think it's the most important launch of this year, for a few reasons.

Iván Espinosa: Well, whether it's important or not, of course, it's important. I think it's the most important launch of this year because of a few reasons. One is in one of the most important markets where Nissan operates. Second is in the largest segment in the US. Third, it will give us access to a market that we didn't have access before. It will serve two purposes, Daniel. One, it will give us incrementality, because today there's a part of the market that we are unable to tap into because some of our competitors are already marketing at around 50% or 60% of their mix on hybrid, and we don't have that. This will give us access to that.

Ivan Espinosa: Well, whether it's important or not, of course, it's important. I think it's the most important launch of this year because of a few reasons. One is in one of the most important markets where Nissan operates. Second is in the largest segment in the US. Third, it will give us access to a market that we didn't have access before. It will serve two purposes, Daniel. One, it will give us incrementality, because today there's a part of the market that we are unable to tap into because some of our competitors are already marketing at around 50% or 60% of their mix on hybrid, and we don't have that. This will give us access to that.

Speaker #3: So, one is in one of the most important markets where Nissan operates. Second is in the largest segment in the US. And third, it will give us access to a market that we didn't have access to before.

Speaker #3: So it will serve two purposes, Daniel. One, it will give us incrementality because today there's a part of the market that we are unable to tap into, because some of our competitors are already marketing at around 50% or 60% of their mix on hybrid.

Speaker #3: And we don't have that, so this will give us access to it. Second, it can also help reduce the level of spending that we have on incentives.

Iván Espinosa: Second, it can help also reducing the level of spending that we have on incentives, because we have many customers coming back from a lease that they want hybrid. We don't have a hybrid, and in order for us to keep them with us, we need to sweeten the deal a little bit. This we expect to change once we have the Rogue e-POWER in the market. We're confident because we have received very strong feedback from media. Those that have tested it, the very specialized, strong media have been very, very supportive of the product. They recognize the strengths on the quietness and the acceleration, the smooth performance, and also, of course, it has a very competitive fuel economy.

Ivan Espinosa: Second, it can help also reducing the level of spending that we have on incentives, because we have many customers coming back from a lease that they want hybrid. We don't have a hybrid, and in order for us to keep them with us, we need to sweeten the deal a little bit. This we expect to change once we have the Rogue e-POWER in the market. We're confident because we have received very strong feedback from media. Those that have tested it, the very specialized, strong media have been very, very supportive of the product. They recognize the strengths on the quietness and the acceleration, the smooth performance, and also, of course, it has a very competitive fuel economy.

Speaker #3: Because we have many customers coming back from a lease that want a hybrid. We don't have a hybrid, and in order for us to keep them with us, we need to sweeten the deal a little bit.

Speaker #3: So, this is something we expect to change once we have the Rogue e-POWER in the market. And we're confident because we have received very strong feedback from the media.

Speaker #3: So those that have tested it—the very specialized, strong media—have been very, very supportive of the product. They recognize its strengths: the quietness, the acceleration, and the smooth performance.

Speaker #3: And also, of course, it has a very competitive fuel economy. So we believe we have the right product—the winning product—for the US.

Iván Espinosa: We believe we have the right product, a winning product for the US, and that's why we are confident that we can overcome these challenges that we have with the outgoing model. Thank you for the question.

Ivan Espinosa: We believe we have the right product, a winning product for the US, and that's why we are confident that we can overcome these challenges that we have with the outgoing model. Thank you for the question.

Speaker #3: And that's why we are confident that we can overcome these challenges that we have with the outgoing model. Thank you for the question.

Speaker #2: With that, we will close the session for today. Thank you for joining us. If you have any further questions, we'll be happy to help as the Nissan Communications team. Have a good evening.

Lavanya Wadgaonkar: With that, we will close the session for today. Thank you for joining us. If you have any further questions, we'll be happy to help as Nissan communications team. Have a good evening. Thank you.

Operator: With that, we will close the session for today. Thank you for joining us. If you have any further questions, we'll be happy to help as Nissan communications team. Have a good evening. Thank you.

Q1 2026 Nissan Motor Co Ltd Earnings Call

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