It seems things are much worse over at Nissan than first thought. The carmaker announced its first drop in annual profit in seven years today, the first major loss under the guidance of Carlos Ghosn who admits that it’ll be at least 12 months until key production targets are met. Nissan has been losing ground to its main rivals, Toyota and Honda, with blame centering on higher raw material costs, sales incentives and an aging product range.

"We told you it would be a challenging year for Nissan. Unfortunately, that prediction proved accurate," said Ghosn. According to Nissan’s own financials, group net profits were down 54% for the January-March quarter, however, quarterly sales were up roughly 7%. The trouble at Nissan has been going on for some time now. Earlier this year, Ghosn ordered a shakeup of the carmaker’s senior staff so that he’d have more time to concentrate on the company’s financials in Japan. These latest results are the first bad figures on Ghosn’s report card since being appointed as CEO back in 2001. The Frenchman is credited with turning around Nissan’s fortunes in the early parts of the decade and bringing back the carmaker from the brink of bankruptcy.

Nissan is now in need of a rejuvenated product line and is criticized for lacking economic and fuel-efficient hybrid models. But Nissan isn't the only Japanese carmaker suffering lower profits. Honda reported a 20% drop in profits over the same quarter despite maintaining sales over the period and achieving its seventh record year of sales in a row.