Nissan today caused ripples in the global car industry with the surprise announcement that profits had plunged 22.6% during the October-December quarter.

Japan's third-biggest carmaker blamed the disappointing results on rising commodity costs, stagnant sales and competition.

The results, coming after five straight quarterly profit rises, prompted Nissan to cut its profit forecast for the current fiscal year by 12% to ¥460bn (£1.93bn).

If the forecast materialises it will be Nissan's first annual decline in profits for seven years.

Nissan's fortunes contrast with those of Toyota, which is enjoying record earnings after gaining a foothold in the US market at the expense of local carmakers, including General Motors.

Nissan, which is 44% owned by Renault, said its net income had fallen to ¥104.5bn in the third quarter compared with ¥135bn a year earlier.

Sales climbed just 1.8% from a year ago to ¥2.34 trillion, and the firm warned that it would probably not reach its full-year global sales target of 3.7m vehicles.

"With the third quarter over, it is certain we won't be able to reach the global sales target," Joji Tagawa, Nissan's corporate vice president, told reporters.

Carlos Ghosn, Nissan's president and chief executive officer, said: "Against an environment of high raw material and energy prices, no pricing power and continuing weakness in mature markets, our industry is faced [with] many headwinds.

"For the first time since 1999, risks outweighed opportunities."

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