Nissan has reported a net loss of 233.7 billion yen (£1.59 billion) for the past year, but insists its results were better than expected.
Sales of the company's cars fell by nearly 10% to 3.4 million units during the year to 31 March 2009, with the largest drop experienced in the US market.
Nissan also said that it expected to report a net loss of 170 billion yen for the next financial year, along with a further reduction in its car sales to around 3.1 million vehicles.
Despite the gloomy predictions, Nissan's chief executive, Carlos Ghosn, said: 'The global recession and financial crisis continue, but we are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence.
'2009 will be another challenging year. Our priorities will be preserving cash, improving our profitability and pursuing deeper synergies within the Renault-Nissan Alliance.'
The news of Nissan's loss follows Monday's announcement that confirmed Toyota's largest-ever annual net loss.
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