A slumping American car market, a new appetite for scooters and rapidly swelling manufacturing costs have hammered profits at Nissan, the Japanese automotive giant run by Carlos Ghosn.

Blugeoned by a much stronger yen and a higher bill for materials, profits in the first quarter of the financial year took a 43 per cent beating: net income between the start of April and the end of June was just Y52.8billion (£250m), compared with the Y92 billion logged in the same period last year.

The company also set aside hefty provisions of Y42 billion to cover what it called “residual value risk” on leased vehicles in the US and Canada.

Claiming that the company remains “resilient”, Mr Ghosn left full-year profits and sales forecasts unchanged, although some investors believe that the group will continue to feel the pain of rising steel and aluminium prices.

Soaring material costs have begun to unpick the Nissan turnaround story engineered by Mr Ghosn. When he took over the company in the late 1990s, it was on the verge of outright collapse and its revival only came after its new Brazilian-Lebanese chief executive slashed manufacturing costs.

With group sales also dropping 4.1 per cent over the quarter Nissan’s future problems, said analysts, now arise from the surging cost of crude oil and its derivatives. Pump prices of petrol and diesel have prodded wealthier US consumers to buy cars like the Toyota Prius, that boast better fuel consumption; the less well-off have taken the quest for fuel efficiency onto two wheels. Yamaha is among a number of scooter makers that has seen brisk sales of scooters and mopeds in both the US and developing countries where fuel subsidies have been scrapped.

Unlike its rival Honda, which saw quarterly profits advancing on stronger sales of small, fuel efficient cars, Nissan’s commercial vehicle line-up has also proved less popular with increasingly cash-strapped US drivers. Among its hardest-hit product lines was Nissan’s Titan pickup truck, whose sales sank by 20 per cent. Those difficulties last month forced the company to announce 1,200 job cuts in the US.

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