Nissan posts profit drop

TOKYO (AP) ? Nissan marked its first drop in annual profit in seven years on Thursday, the first such setback under the leadership of Carlos Ghosn, who salvaged the Japanese automaker from collapse. He also acknowledged Nissan would need an extra year to meet a key production target.

The big problem at Japan?s No. 3 automaker, which makes Infiniti luxury models, Altima sedans and Z sportscars, has been faltering sales in important markets at a time when offerings from Japanese rivals Toyota Motor Corp. and Honda Motor Co. are hot-sellers.

Higher raw material costs, incentives ? discounts to woo buyers ? and a lack of new models hurt Nissan’s performance, Nissan chief executive Ghosn told reporters.

“We told you it would be a challenging year for Nissan. Unfortunately, that prediction proved accurate,” said Ghosn.

Nissan said its group net profit plunged 54 percent in the January-March quarter to 70.6 billion yen ($595 million), down from 152.4 billion yen, job-reduction costs and higher taxes offset improved sales.

Tokyo-based Nissan also has been slow to offer hybrid models powered by gas engines and electric motors. Hybrids still don’t sell big but are critical symbols for an automaker’s image as cutting-edge.