Japanese automaker Nissan reported a drop in first quarter profits yesterday, under pressure from rising material costs and a higher yen, reports AFP from Tokyo. Nissan said sales were up in China in the three months to June, but fell in North America and Europe. The firm's quarterly net profit in the period dropped 14.1 percent to 115.8 billion yen ($1.05 billion). Operating profit was down 28.8 percent to 109.1 billion yen, with sales also down slightly to 2.7 trillion yen.

Unit sales fell in the US, and development costs rose during the quarter, said Joji Tagawa, corporate vice president. "That was offset by increased sales in other regions and efforts to reduce procurement costs," he told a press conference. "But it was not enough to offset the rising prices of raw materials, which we have been seeing since last year, and the negative impacts of currency exchange rates. We saw falling income and falling profits as a result," he said.

While US tariffs on steel and aluminium, and threatened tariffs on automobiles, have roiled markets and upset trade relations, Tagawa said the firm saw little impact.

It "was not zero" but was minimal, he said.

"We have long made efforts to localise production around the world. This has proven to be an effective way to avoid trade problems, forex problems and changes in local demand," he said.

Nissan maintained its annual forecasts, with net profit forecast at 500 billion yen.

Operating profit is expected at 540 billion yen on annual sales of 12 trillion yen.