Nissan Diesel business plan calls for 40% debt cut

TOKYO, Sept 24 Reuters reported that Nissan Diesel Motor Co on Tuesday unveiled a new business plan calling for the struggling Japanese truckmaker to cut its group interest-bearing debt by around 40 percent to 250 billion yen ($2 billion) by March 2006.

The firm also said it would expand ties with China's second-largest auto group, Dongfeng Motor Corp, to further Nissan Diesel's advance into the growing Chinese market and help counter the sluggish and overcrowded domestic truck market.

A decade-long decline in domestic demand for trucks has battered Japan's four truckmakers, and Nissan Diesel -- owned 22.5 percent each by Nissan Motor Co Ltd and Renault SA-- is regarded as one of the weakest.

The firm, whose business plan was well-flagged in the Japanese media last week, had interest-bearing debts of 416.9 billion yen as of March 31.

Nissan Diesel also said it would aim for an operating profit margin of 5.5 percent in the year to March 2006, compared with 3.1 percent in 2001/02, by selling assets and expanding after-sales services.

The truck and bus maker eked out a 0.9 percent rise in group net profit to 610 million yen in 2001/02, but its group sales fell eight percent to 371 billion yen.

It is forecasting a group net profit of one billion yen on sales of 380 billion yen in the current year to next March.

Nissan Diesel set up a truck and bus making joint venture with Dongfeng in 1996, and last week Nissan Motor said it would invest $1 billion in a new venture with Dongfeng in China that would aim to roll out 550,000 vehicles by 2006.

Many firms in other industries such as steel and construction where domestic demand has been shrinking have been looking to China and other growing Asian markets as saviours.

Demand in China for commercial vehicles is expected to be especially brisk in the run-up to the 2008 Summer Olympics to be held in Beijing.