Nissan Motor Co., Ltd.

Good evening, everyone. Welcome to Nissan's First Quarter Financial Results for Fiscal Year 2025.

Today, along with financial results, we will also cover Re:Nissan progress. Today's session will be for 45 minutes and is held on site with live streaming.

First, let me start by introducing the speakers for today. Ivan Espinosa, Chief Executive Officer; Jeremy Papin, Chief Financial Officer.

Before I hand over to our CEO, I will explain the flow for today's session. First, Ivan will provide an update on our Re:Nissan recovery plan, followed by Jeremy will then cover the financial results for the 3-month period ending June 30 and our latest outlook.

We will then take your questions. Let me hand over to Ivan.

Thank you, Lavanya. Good evening, everyone.

I hope all of you are safe in light of the tsunami morning. Please take all necessary precautions and stay close to your loved ones.

11 weeks ago, I announced the Re:Nissan plan and outlined the scale of our recovery efforts. Since then, we've made meaningful progress.

We have a clear understanding of the work ahead and have mobilized teams across the organization to execute the plan with discipline and urgency. While our financial results for FY '25, especially H1, reflect the magnitude of the challenge we face, they also reinforce why the Re:Nissan transformation is so critical and why our disciplined approach must continue.

Let me begin by recapping the plan and detailing the concrete actions we have taken so far. As a reminder, the focus of Re:Nissan is to restore out of profitability and achieve positive free cash flow by fiscal year 2026.

This is not the final goal. It is the foundation.

To drive a robust and sustainable recovery, we are executing a comprehensive recovery across 3 key drivers. We are implementing measures to reduce costs.

We are redefining our approach to products and markets by aligning offerings more precisely with the real market demand. And we are reinforcing key partnerships to unlock economies of scale and deliver value at significantly lower cost.

Today, I will update progress on 2 drivers: First, reducing costs. We are reshaping our cost structure, aiming to save JPY 500 billion through both fixed and variable cost reductions.

We have taken a decisive action to reduce variable costs and the Obeya office is now driving this transformation forward with speed, discipline and measurable impact. The Obeya team brings together 300 specialized experts backed by 3,000 colleagues, who have temporarily shifted from long-term product work.

For 3 months, they are focused entirely on reengineering how we approach cost reductions, working in fast-paced sprints to deliver impact quickly. The team has already generated over 4,000 cost-saving ideas, 1,600 of which are now implementation ready.

We have already identified actions that are giving us visibility in 2/3 of the net cost savings, underscoring our commitment to disciplined cost management and rapid delivery. In addition, we are eliminating inefficiencies that still exist in some areas and challenging legacy practices with discipline and urgency.

The momentum is real and the transformation is underway. We're still in the early stages of our recovery, but we are already making steady progress in reducing fixed costs.

Of the 7 manufacturing sites, we plan to reduce from our footprint, 5 have already been announced. To go through this again, production in Argentina of the Frontier and Navara pickups is being transferred to Mexico.

We have sold our 51% in our joint venture plant in India to our partner, Renault, which will continue to produce Nissan vehicles in the future. Here in Japan, we will transfer production from the Oppama plant to our Q2 production base with vehicle assembly in Oppama ending by fiscal year 2027.

The production of the NV200 van at the Shatai Shonan plant will end by fiscal 2026, marking the end of Nissan model production at the site. And today, we announced the fifth production site in Mexico.

We will transfer production from the CIVAC plant to our Aguascalientes production site with vehicle assembly in CIVAC ending by fiscal year 2025. Beyond this, we continue to execute measures for efficiency.

And so far, we have consolidated production at the plant in Thailand, moving to a single assembly line and announced changes to ship in U.S. and the U.K.

plants. To drive fixed cost reductions beyond manufacturing, we have formed a dedicated cost task team.

These efforts are already delivering results. They are showing more than JPY 30 billion realized in Q1, providing strong visibility for the full fiscal year.

We also have a clear road map to achieve our target of 20% reduction in the average engineering cost per hour. The task team is conducting a comprehensive review of expense overheads and auditing capital expenditures across the value chain to ensure every opportunity for cost efficiency is captured.

We will continue to update you as they -- as we have available updates. Now moving to the next driver, redefining our product and market strategy.

Since the launch of Re:Nissan, we have taken decisive steps to reshape our market approach and align our product offerings with customer demand across key regions. The models introduced in Q4 of last fiscal year are gaining strong traction and we are building on that momentum.

In Q1 of this year, we introduced additional models and we will continue to expand our lineup throughout the remaining part of the year and beyond. Highlights for Q1 is our new heartbeat model, the all-new LEAF, which will be introduced in the U.S., Europe and Japan.

In addition, we are focused on high demand models, including the next-generation Kei car and the Elgrand in Japan. In the U.S., we are expanding our SUV portfolio with the PHEV Rogue, alongside the Armada, Pathfinder and INFINITI QX60.

A new Sentra will also be introduced as a core model for North America. In Europe, where electrification continues to drive demand, we have launched the Micra EV and the Qashqai with the next-generation e-Power system.

In Mexico, Nissan maintained its leadership position with successful launches like Magnite, contributing to solid sales and segment dominance. In China, the new N7 NEV is already proving to be a sales success, and we are preparing to export China-made vehicles to other markets.

Our product offensive is accelerating, and further model announcements are planned for the months ahead. Let me stress again, Re:Nissan recovery is a 2-year plan, and we are progressing with discipline and intent at the right pace.

Fiscal year 2025 is our transition year, the year in which we are taking decisions as we simultaneously execute actions. These actions are being delivered in structured phases, each with clear milestones and accountability.

While we expect to see tangible impact of our variable cost transformation by the end of this fiscal year, we do acknowledge that viable costs will take a bit of time to show in our results. This is due to the nature of changes we need to implement in our operational framework.

The consolidation of our manufacturing footprint is on track for completion by fiscal year 2027. We are also working on the consolidation of our powertrain production, and we'll share progress in due course.

Our workforce reduction is progressing in phases, aligned with the timing of operational changes across locations. In parallel, we are also executing actions to optimize G&A expenses, an area where we are already seeing good progress.

Our focus on streamlining development activities is on track with benefits expected to begin showing in the first half of fiscal year 2027. Now let me conclude with reaffirming that each stage of the Re:Nissan plan is being implemented with discipline, dedication and with a focus on delivering enduring value.

With that, I will hand it over to Jeremy, our CFO, to present the Q1 results. Jeremy?

Thank you, Ivan. Good evening, everyone.

As Ivan noted, we are advancing steadily with Re:Nissan and that progress is encouraging. At the same time, the magnitude of our challenge remains significant as reflected in our Q1 results, which reinforces the urgency of continued disciplined execution.

Let me begin with a brief overview of our Q1 performance. As expected, we had a muted start to the fiscal year with retail sales down 10%.

Our operating loss of JPY 79 billion was better than we had guided in May, thanks to onetime gain and early signs that our fixed cost control are starting to take effect. Free cash flow was a negative JPY 390 billion, but our automotive gross cash position remained solid with more than JPY 2 trillion.

To reinforce our financial flexibility, we raised JPY 860 billion in July through straight and convertible bonds, fully covering FY '25 debt maturities. At the end of June, our total automotive liquidity stands at JPY 3.1 trillion, including the $2.1 trillion cash on hand and another JPY 1 trillion auto cash lent to Sales Finance.

On top of this JPY 3.1 trillion of cash, we also have access to JPY 1.8 trillion in committed unused credit lines. Looking ahead, we are maintaining our fiscal year '25 retail sales forecast.

And we are introducing a Q2 operating loss expected at negative JPY 100 billion. Our free cash flow in Q2 is forecast at approximately JPY 350 billion negative with a return to positive territory anticipated in the second half of the year, supported with our seasonal pattern.

Let me go through the details of the Q1 results. Unit sales in Q1 were down mainly due to continued challenges in China.

Competition in China remains intense. The non-premium JV segment continues to shrink and the price war has escalated further.

As a result, our unit sales in China dropped by 27.5%. We faced an 11% decline in Japan with returning competition in the Kei car segment and consumer hesitations toward Nissan.

The 2.4% decline in North America is partly due to our adjustments to the tariff impacts that are reshaping the competitive landscape. In particular, we focused our sales efforts on U.S.-produced vehicles and prioritized private retail channels, while scaling back rental fleet sales.

This strategy is beginning to gain traction as seen in month-over-month improvements in our U.S. retail market share trend.

A notable highlight is Nissan being ranked the #1 mass market brand in J.D. Power's initial quality survey, an achievement that could positively influence both our brand image and sales performance.

In Europe, we saw a 5% decline primarily driven by reduced overall demand for electrification, particularly due to the LEAF full model changeover and the end of production of the NV400. The 9% decline in other markets was mainly driven by the Kicks model change in Brazil.

On a positive note, volume growth in the Middle East was fueled by strong demand for the Magnite and the introduction of the new Patrol. Proceeding to the right-hand side of the chart, our production volumes declined by 14%, primarily due to a 31% reduction in China.

This was driven by ongoing restructuring efforts and production optimization, including reduced operating hours and capacity adjustments. In parallel, we are proactively managing lower dealer inventories ahead of the model year changeover in the U.S.

and the launch of new models in Europe and in Japan, aligning production with anticipated demand and managing impacts to our free cash flow. Consolidated net revenues for the period were JPY 2.7 trillion with an operating loss of JPY 79 billion and a net income loss of JPY 116 billion.

Excluding sales and leaseback operation, CapEx was largely flat year-over-year. And through disciplined control in R&D, we reduced our expenses from JPY 148 billion to JPY 140 billion.

In the core automotive operations after elimination, revenues were JPY 2.4 trillion, reflecting lower wholesale volumes as well as a roughly JPY 200 billion negative foreign exchange impact. Our operating loss deepened to JPY 158 billion, including a tariff impact of nearly JPY 70 billion.

Consequently, free cash flow in the automotive business was a negative JPY 390 billion. This was expected due to seasonal factors, specifically lower payables in Q1 that adversely affected working capital.

At the end of the quarter, net cash stood at JPY 1.1 trillion. The operating loss of JPY 79 billion for the period reflects some specific factors.

Of these, we were adversely impacted by nearly JPY 40 billion of ForEx effects, mainly due to the weakening of the U.S. and Canadian dollars.

There was a JPY 69 billion negative impact from tariffs. Our sales performance resulted in nearly JPY 5 billion positive, reflecting positive momentum in volume and mix and incentives and pricing.

However, this was offset by declines in after sales, mainly due to lower wholesale volume. Monozukuri costs resulted in positive JPY 25 billion burdened by higher variable costs but benefiting from better fixed costs and lower depreciation on production assets.

Inflation came in at minus JPY 26 billion. This quarter, we recognized a JPY 29 billion improvement in onetime item, thanks to revised provisions for warranty costs.

Sales Finance and remarketing contributed positively year-on-year with a JPY 19 billion improvement. However, we had to accrue costs related to CO2 compliance.

Our first quarter operating loss of JPY 79 billion was better than the initial forecast as we have taken a cautious stance at the start of FY '25 to account for potential risks. Adjusted for the onetime positive, our underlying Q1 consolidated operating profit stands at negative JPY 109 billion.

Several factors outperformed our expectations, including lower tariffs, a greater positive impact from product mix, lower credit losses in sales finance and stronger remarketing results. We also benefited from solid fixed cost reductions.

We continue to actively manage our automotive liquidity. In early July, we issued JPY 660 billion in euro and dollars trade bonds with maturities ranging in form 4 to 10 years, and JPY 200 billion in our convertible bonds with a 6-year maturity.

Proceeds from the straight bonds will be used to refinance JPY 700 billion of debt maturing this fiscal year. The net proceeds from the convertible bonds are intended to be used over the next few years for investment in new products and technologies, such as electrification and software-defined vehicles.

For Q1, prior to the bond issuance, we ended the period with total available liquidity of JPY 3.1 trillion. This includes JPY 2.1 trillion of auto cash and cash equivalents on hand and around JPY 1 trillion of auto cash that is linked to sales finance companies.

In first quarter, sales finance repaid some of the cash it borrows from auto, while increasing its securitized funding. Additionally, we have JPY 1.8 trillion in unused committed credit lines if needed.

We maintain ample liquidity for upcoming maturities and to cover our funding needs as we continue to restructure the business. I will now move to the outlook.

We are -- on volume, we are confirming our previous forecast that we provided in May. We expect retail sales to reach 3.25 million vehicles this fiscal year, down by 2.9%, mainly due to a projected 18% decline in China.

Sales in Japan, North America and Europe are likely to be flat year-on-year, while other markets are forecasted to grow 6.6%. As explained by Ivan earlier, we are ensuring our global product momentum.

This will enable us to reverse the Q1 and grow our global retail sales starting from Q2 onwards. Production volume is projected to be 3 million units as we continue to manage inventories.

We expect net revenue of JPY 12.5 trillion for the current fiscal year. But given the external market environment, in particular, the ongoing uncertainty related to tariffs, we are not able to provide a detailed full year forecast.

I would like to share our current visibility for the second quarter. Revenue of JPY 2.8 trillion, an operating loss of JPY 100 billion and automotive free cash flow of negative JPY 350 billion.

These results reinforce the urgency of executing the Re:Nissan plan. At the same time, they show some improvements compared to the first quarter once adjusted for onetime gain.

Let me reiterate Ivan's words. Re:Nissan is more than a plan.

It's a company-wide commitment. With clear oversight and cross-functional execution, it's helping us rebuild competitiveness.

We truly appreciate our employees and partners' commitment and the support on this journey. Thank you.

Thank you, Jeremy. We will now open for Q&A.

[Operator Instructions] Okay, we go straight in the middle. Yes.

I am from Nikkei. My name is Ochiai.

I have 2 questions. The first question, originally, the Q1 forecast was operating loss of JPY 200 billion.

And free cash flow was JPY 550 billion negative. That was the guidance, but the result is better than these expectations.

What were the reasons behind this? What were the positive contributors?

Could you give us an elaboration on this point? This is my first question.

And the second one is the impact of the tariffs. Initially, maximum JPY 450 billion was the exposure that you showed us, if I remember correctly.

And since then, there was a reduction in the tariff. But as of today, for the full year, what is the tariff exposure for the full year?

Is it still JPY 450 billion? Or is it lower than JPY 450 billion?

These are the questions.

Yes. Thank you for the question.

Maybe I'll start with the second one, and I will let Jeremy answer the first one. On the tariff, you are right, there is a change, but it's still not clear to us some of the conditions and when the change for the tariff from Japan to the U.S.

will come in place. So at the moment, it's a bit difficult to give a very accurate forecast.

What we can tell you is that the forecast that we see is a worst-case scenario will be hitting from JPY 450 billion that was our original estimate to JPY 300 billion. This is what we're seeing now, and we will continue updating the number as the rules for the new tariffs come clear, and we will keep updating the market.

Jeremy, would you take the first question, please?

Yes, on the gap between the initial projection for Q1 and the actuals in Q1, I would start by saying that initial projection was a cautious one. And as we had -- we were managing several risks.

The tariff, also a few supplier risk, supply chain uncertainty that did not materialize. In the end, we also benefited in the quarter from a onetime gain on this warranty accrual change, thanks to the improved quality of our products.

So -- beyond that, I would say, tariffs were slightly better and we had good contribution from many various small factors. I mentioned in my speech, credit losses, remarketing, product mix, a number of factors coming in a bit better than expected as well as impact from our fixed cost reduction being slightly stronger than we expected in Q1.

We move on to the next question.

[Interpreted] My name is [indiscernible]. I have 2 questions.

Earlier, you talked about the sales decline in Japan because consumers are losing confidence in Nissan or they are hesitant to by Nissan cars in order to increase or regain the confidence what you need to do. And Oppama plant and Nissan Shatai Shonan, you are going to stop the production of vehicle at these entities.

Explanation to the employees and suppliers are underway. That's what I understand.

So where are you in terms of progress? And Espinosa san, what kind of things did you hear from these stakeholders?

And Espinosa san, was there any impressive examples of VOC that you can share with us? These are the question.

Thank you for the questions. So on the sales decline in Japan, what we're doing is accelerating our product offensive.

You have seen the all-new Nissan LEAF, which is the first car -- of a series of cars that will come in Japan. Japan is our home market and these are one of the most important, of course.

So this car will be followed by new Kei car, and we will also have Elgrand, right after that. And then entering early next year, we'll have a new Kicks.

And as we announced on May 13, we are working on preparing an all-new Skyline, which will be the first car that will be utilizing our new development process, that is to develop new cars under 30 months. And it's an icon of speed as a car, and we expect it to be an icon of speed of our company on how we develop cars.

So we are very actively preparing this. And we are, of course, focusing on satisfying our customers' requirements and bringing very exciting cars.

There's a multitude of cars coming into Japan, as I said, in the next 8 to 12 months. And I'm sure customers will be surprised with what we're preparing for them.

As for your question on how are we addressing Oppama situation. As we said at the beginning, Nissan is very responsible.

So we're moving very quickly, but we're being fast and decisive but with responsibility. And maybe you have seen I've been interacting with many stakeholders throughout the past few weeks, of course, starting with employees.

First action I took right after the decision was made was to have a town hall meeting in Oppama to explain them the situation, explain them why the decision was taken and try to -- listen to their concern and try to alleviate anxiety. We have also started to engage very actively with the government at the different levels, including national government, perpetual government, city of Yokosuka government, and city of Yokohama government.

There's a task force in place in which we are participating very actively providing appropriate information about the suppliers that are affected. And we will continue to work with the government in a very transparent manner to manage the situation, as I said, in the most responsible manner, trying to make the transition as smooth as possible.

So this is what we are doing in the situation of Oppama, which, as I said, is a difficult decision that we had to take, but a decision that had to be made. And we will move forward with the plan with the support of all the stakeholders.

They have been very, very supportive in our journey. Thank you for the question.

Next question, please. If you can come to the first row.

[Interpreted] My name is [indiscernible]. I also have 2 questions.

First of all, regarding the units forecast. 3.25 million, down by 96,000.

It hasn't been adjusted, but there has been a reduction of 80,000 in the Q1, and domestic in China has been the blunt. And early June, the performance wasn't so good.

And Nissan has frequently downgraded the unit forecast. But -- what's the probability that your guidance on the second half of units would be right?

Secondly, you mentioned the CIVAC. And my question is with regards to consolidation in Mexico, is the first one.

And here from Mexico, Mr. Espinosa, it wasn't an easy decision, but why CIVAC?

Could you explain the basis of that decision?

Thank you. Let me start with the second one.

As we have explained before, we are consolidating our footprint from 17 plants to 10. And one of the beauties of a Nissan industrial system is a wide coverage that we have around the world.

The issue that this system has is that it's too big. So we have to -- or we are trying to keep a very strategic geographical coverage, while we resize the system to something that is more manageable for the level of revenue that we are commanding.

Now the decision of consolidating in Aguascalientes is because there's many advantages around Aguascalientes in terms of logistics, in terms of efficiencies that can be found by integrating the operation there. We had originally anticipated to stop some operation in CIVAC.

So CIVAC has 2 lines: passenger vehicle line, which was already scheduled to stop activities this year. And then when we made the analysis, we found that the most efficient way was to consolidate everything into Aguascalientes.

And this is the reason why we made this, again, painful decision, as you said, not only because I'm from the region because it's affecting the lives and sustain of families. And this is regardless of where we are operating in the world.

The impact is the same. And we will behave in the same way, as I said, with responsibility and caring for the employees trying to support in the best way we can.

As for the forecast on the sales, the reason why we're keeping the number at 3,250 is that, as we explained earlier, we have a very strong product offensive coming. We have cars coming in Japan, and we have also some car that will be introduced in the U.S.

We see some early signs of good tractions in our retail sales performance in North America in the past months. Year-over-year, we have a 2% increase on the retail sales.

And quarter-over-quarter, we have a 12% increase on the private retail sales. So this is giving us, I would say, a prudent confidence that the number can come as we originally planned.

This is what I can tell you about the forecast of sales. You want to complement, Jeremy.

Yes.

Maybe just to complement on China, the China numbers that you see here are for the calendar year, first 3 months. We consolidate China with a 3-months lag.

In the calendar Q2, the sales in China were actually only down 8% year-on-year and June was up year-on-year. So June -- year-over-year is the first time we have growth in the past 3 months.

So to give you a bit of a flavor of how the volume is looking recently. And again, it's with prudent confidence that we see the performance coming in.

We move on to the next question. Any hand raises.

Can you come to the first row. To the lady, please.

[Interpreted] I'm from Nikkei BP and Nikkei Automotive. My name is [indiscernible].

In Re:Nissan program, I have 2 questions. The first question is as follows: Cost -- as part of cost reduction, Nissan's Canton plant, pickup trucks for Honda may be produced, and that's under consideration according to the media report is this true?

If it were true, where is -- what is the progress of the discussion with Honda, which you can disclose as of today? That's my first question.

And the second question, with Honda -- in collaboration Honda, commonization of software is being considered. That's what the media reported.

If you do so, ASIMO OS will be adopted by Nissan eventually? Is there anything that you can disclose as of today?

Thank you. I think you said it.

This is a media report, so we have not confirmed any of this. What I can tell you is that we are actively working with Honda on several projects around vehicle collaboration and also around intelligent car technology.

Domains of software and domains of autonomous drive technology. This is what we are working and discussing with them.

But we have nothing to announce or confirm at the moment. Thank you for the question.

[Interpreted] I am a journalist. Oppama plant, people are asking when -- how you are going to use the landlord?

And you are talking to several potential partners, there's nothing that you can disclose. Can you disclose whether there was progress in the discussion?

And was there any prioritization in the way you reuse the land? Is there any update about the Oppama plant reuse?

For the question, at the moment, what we have decided is that we will stop the vehicle plant. So this is a confirmed decision.

And there is no visibility of having anything related to vehicle production at the moment. So the visibility of any partnership or anything is very low.

So we are not confirming anything on this. What I can tell you is that we will be discussing potential utilizations in the future, including, of course, the community because we would like to continue adding value to that community by utilizing the land and the location that we have for something that is contributing to society and as a responsible corporate citizen.

So -- this is what Nissan will be doing. And we are -- again, for the moment, we are focused on the employees.

We are focused on the transition. We are focused on alleviating the anxiety, having clarity on what the options for them will be.

And at the second step, we will start seeing how we repurpose the land for the moment, the priorities of the employees. Thank you.

Thank you for your question.

Next. Yes, please.

[Interpreted] My name is [indiscernible]. I have 2 questions.

The first one, compared to the initial expectation, the results are better, but operating loss was generated in Q1? And how do you assess it?

What's your take? And for tariff exposure, JPY 450 billion will come down to JPY 300 billion.

Compared to initial expectation, it's better. How do you assess this?

What's your thinking?

So on the -- I mean, obviously, the Q1 results are weak and just are further stressing the importance of the Re:Nissan plan. We -- and the need to address the cost competitiveness and to resume the growth of the business.

So I think we take them as a -- as the situation that we have to deal with further exacerbated by the size of the tariff headwind. And it just highlights the fact that we need to be decisive and speedy in implementing decisions that can turn around the business and build a sustainable growing platform.

On tariffs, yes, the exposure is lower. It obviously, -- tariffs rules, regulation have been evolving, and that's been driving some of the decline.

We've also made adjustments to our cash flow. We've made some adjustments to where production are built or parts are imported from and this is why we can confidently say that the worst exposure -- the worst level of exposure should be JPY 300 billion now.

Okay. And then please to the gentleman.

[Interpreted] TV Tokyo, my name is [ Abe ]. Espinosa san, I have 2 questions for you.

The first question, the other day, between Japan and U.S., they agreed on the tariff. Based on this agreement, from the 1st of August, 15% will be imposed.

With regards to the content of agreement, what's your assessment? What's your take?

This is my first question. What's your reaction to the agreement between the 2 countries?

I think that is helping. But again, as we said, still the starting date is not clear.

You said it's August 1st, but it's still something that is not confirmed. So we are observing these very closely.

And of course, it's something that we welcome because it's alleviating the situation. And we will continue monitoring this and adapting ourselves to the environment as we go forward.

The good thing is we have flexibility of production, as you know. So we have one of our core products that is produced in Kyushu at the same time in Smyrna.

So we have this flexibility that allows the business to balance in a smart way. And this is what we will be doing moving forward.

But we do expect this to have some news in the future also about the tariff with Mexico because as you know, we have also a significant volume coming in from Mexico, and we are expecting something to come hopefully in the coming weeks. So this is what I can tell you about our view on the tariff situation.

Thank you.

[Interpreted] You mean -- second question, yes, second question, may I. Okay.

Second question, funding. I have a question about funding.

JPY 860 billion has been issued for the bonds. On this point, you said that there was the demand for investors.

The investors has an appetite. But after you announced the share price came down.

More than 8% of high yields are seen in some cases. So there may be a financial risk here.

This decision-making process and evaluation, how do you see this?

So on the funding, I think the funding was significant testimony of some confidence that the capital markets have in the ability for the company to be turned around. The share price impact you're referring to, I think, is driven by the fact we were issuing shares alongside the convertible.

And so the market share price was adjusting for that increase in the number of shares. I think adjusted for that.

The market cap is actually higher than it was before on a fully diluted basis. In terms of funding costs, what I would say is that the base interest rates across Europe and the U.S.

have obviously changed over the past several years. When we look at the Nissan spreads, they were at the same level as what we paid back in 2020.

And the net interest cost that we are planning to face with this emission is to pay an average 3.5% when swapped in yen. So I think it's a very acceptable level of cost for the size of the funding that we had to exercise.

Sure. I have time for only one question.

So let me check in more because -- I saw him going up. Yes.

Second row first person. Yes.

He was the first person.

[Interpreted] Newspaper. My name is [indiscernible].

In China, sales are coming down, but N7 has been quite popular. And Mr.

Espinosa, how do you evaluate the model N7? And you said that there's a possibility of exporting vehicles from China and the preparations are underway.

Can you give us the time line and the size of that kind of export to the extent possible, can you share more information?

Thank you for the question. Yes, N7 is coming -- is a very popular car.

Reason for this is a car that it was planned with the customer at the center. And successful cars usually are successful when you do that.

And we achieved that by utilizing the 23 years experience we have with our partner there. As you know, we have the technical center Dongfeng Nissan, and we developed the car together with a Chinese customer in mind and leveraging on the assets and the experience that we have there.

So we were able of developing this car with China's speed, China technology and China cost. And this is what's making this car successful.

And the launch was also very well done by the team in China. It gave us confidence that our brand still has some strength in the market.

And it's proved that when you make a good car, then you can really still hit strong with the Nissan brand. And China, as you know, is one of the toughest markets in the world.

And this is giving us confidence that our brand is still strong. And when we make good cars, which is what we know how to do, we can still progress forward.

And this is what we're going to do, not only in China, but in Japan and outside of Japan as well.

In the rest of the world.

So this is what we said to do with the new products are coming. As for the schedule, yes, we are nothing -- we have nothing to share today on the schedule, but we are progressing quickly, to bring this car to selected markets around the world.

Again, no detail to be shared today, but we want to leverage on these values that we have in China of speed of technology and of course, to bring this product and some other products that are being prepared to some selected markets outside of China. We will share more detail when we are ready.

Thank you. Thank you for the question.

I think I can take one quick question maybe from NHK.

[Interpreted] U.S. tariffs is what I would like to ask about.

In future plan, you are building cars for U.S., which is SUV and you are adjusting the production volume at Kyushu for this car. Now tariffs is agreed on 15%.

The product -- is there any impact on the production plan in Japan? In relation to this, in relation earlier, Espinosa san, agreement on 50% -- 15% is what you welcome, but 15% is not small.

Is it in terms of absolute terms. Will this impact the pricing?

Or how are you going to approach the pricing strategy in that market?

For the question, as you said, 15% is still 15%. So we welcome the improvement, but 15% is still a challenging number.

And this is why we need to continue our efforts of improving costs, and improving -- or reducing our exposure to tariffs as much as we can, both by looking at component improvement in terms of tariff as well as pricing, as you said. We are monitoring very closely the market pricing, and we will follow whenever we have an opportunity.

As for production, we will -- as I said, one of the beauties that we have is that we have the production in both sides. We have this flexibility.

And we will continue monitoring how the market is evolving and adjust to optimize the profitability that we can drive with the combination of the 2 production sites. The good thing also is that Rogue is also having out of the vehicles that are improving in terms of our retail sales.

Rogue is also one of the products that is benefiting from this. And it's a product that, as you know, is very important for us in the lineup, and we will continue pushing these vehicles forward with a good balance of pricing, a good balance of customer offer and taking a good close look at the inventory that we are carrying.

Our inventories are also improving a lot, by the way. We have managed to adjust to be only around 60 -- 6 days, sorry.

6 days above the industry average at the end of June, which is a very strong improvement versus where we were at the beginning of the year, and we're managing that with a lot of discipline. Thank you.

Thank you for the question.

Thank you. We are just about time.

And this will be our last question. Once again, thank you for joining us.

If you have any further questions, our communications team is always there to support. Thank you.

Have a good day.