160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! TOKYO — Nissan marked its first drop in annual profit in seven years on Thursday, the first such setback under the leadership of Carlos Ghosn, who salvaged the Japanese automaker from collapse. He also acknowledged Nissan would need an extra year to meet a key production target. The big problem at Japan’s No. 3 automaker, which makes Infiniti luxury models, Altima sedans and Z sports cars, has been faltering sales in important markets at a time when offerings from Japanese rivals Toyota Motor Corp. and Honda Motor Co. are hot sellers. Higher raw material costs, incentives — discounts to woo buyers — and a lack of new models hurt Nissan’s performance, Nissan Chief Executive Ghosn told reporters. “We told you it would be a challenging year for Nissan. Unfortunately, that prediction proved accurate,” said Ghosn. Nissan said its group net profit plunged 54 percent in the January-March quarter to 70.6 billion yen ($595 million), down from 152.4 billion yen. Quarterly sales rose 7 percent to 2.8 trillion yen ($23.6 billion), it said. Job-reduction costs and higher taxes offset improved sales. Including an accounting change to take care of some subsidiaries shifting annual earnings periods from the calendar year to a fiscal year starting in April, Nissan said profit fell 46 percent during the quarter to 82 billion yen ($691 million). That number adds an extra quarter from those subsidiaries. Ghosn has been credited with engineering a dramatic turnaround at the company since a 1999 alliance with Renault SA of France, which owns 44 percent of Nissan. The latest results are the first major stumble for Ghosn since he took the helm at Nissan as chief executive in 2001. Tokyo-based Nissan also has been slow to offer hybrid models powered by gas engines and electric motors. Hybrids still don’t sell in big numbers but are critical symbols for an automaker’s image as environmental and cutting edge.For the just-ended fiscal year, profit fell 11 percent to 460.8 billion yen ($3.9 billion), in line with forecasts earlier this year. The company sold 3.48 million vehicles during the year, down 2.4 percent from the previous year, as unit sales dropped 12 percent in Japan, and 4 percent in the U.S. Ghosn, who called Nissan’s woes a “performance crisis” earlier this year, assured reporters efforts were under way to revive its business, including trimming jobs in Japan and the U.S., revamping dealerships, investing in research and planning model rollouts that he said will wrest the company out of its troubles. But he acknowledged Nissan may need to make up for lost time when it was not able to invest in research for technology as much as it had wanted while undergoing hard times. “We remain focused on our long-term goals,” Ghosn said, adding that better times were ahead for Nissan. Nissan expects profit will grow more than 4 percent to 480 billion yen ($4 billion) in the current fiscal year through March 2008 on 10.3 trillion yen ($87 billion) sales. Ghosn, long a popular hero in Japan with even “manga” comic books written about him, had built a reputation for basing his management on setting targets and meeting them. But he said Nissan needs an extra year to meet its much publicized annual global sales target of 4.2 million vehicles, initially set for the fiscal year ending March 2009. Nissan shares, which have lost about a fifth of their value from earlier this year, edged up 1.9 percent to finish at 1,216 yen ($10.25) in Tokyo.