Nissan Motor and Suzuki Motor capped a turbulent week for automakers everywhere with their own profit warnings on Friday, as executives predicted a rough ride for the foreseeable future.
On top of an economic slowdown around the world and a credit crisis that is shutting many consumers out of auto-loan financing, Japanese automakers are battling a stronger yen, which shaves the value of earnings made abroad.
"I have no idea how long this situation will last," Suzuki CEO Osamu Suzuki told a news conference.
"The crisis in the United States will probably ripple through the rest of the world like a tsunami, sooner or later."
Efforts by U.S. automakers Chrysler and General Motors to forge a merger to help them ride out the crisis hit a snag after the Bush administration ruled out funding the plan, sources told Reuters late on Thursday.
Joining a lengthening list of Japanese automakers, third-ranked Nissan more than halved its operating profit forecast for the year to March 31 to 270 billion yen ($2.7 billion) from 550 billion yen.
That would be just a third of last year's profit and is nowhere close to a forecast of 435 billion yen from a poll of 12 brokerages by Reuters Estimates.
It marks the third time in as many years that Nissan would be missing its guidance, cranking up the pressure on Carlos Ghosn, who also is grappling with sinking profitability at Renault in his dual-CEO role at the Franco-Japanese alliance.
Nissan, 44 percent owned by Renault, also retracted its annual dividend target of 42 yen, which had been viewed as doubtful given the slide in earnings and share price.
It will pay 11 yen for the first half and said the second payment would be disclosed next year.
The news weighed on Renault shares, which were down 4.7 percent, while Paris's CAC-40 index slipped 1.7 percent.
"The results were bad, but I think that's been priced in (to Nissan's shares) already," said Toshihiko Matsuno, assistant general manager at SMBC Friend Securities.