Nikon sold 12% fewer system cameras and lenses worldwide in the year to 31 March 2016, blaming the decline on a ‘shrinking market’.

Demand for the Nikon D5500 was strong, but models such as the D750 suffered from a growth in competition in the mid-range market

Nikon sold 4.04 million interchangeable-lens cameras, a drop of 12.36% on the previous year. This followed a 20% fall in demand for system cameras in the 2015 financial year, compared to a year earlier.

Looking at the year ahead, Nikon predicted that the digital camera market is expected to remain ‘severe’.

The number of lenses sold fell 11.68% to 5.9m, while sales of compact cameras plunged 19%.

Falling DSLR sales led to a 19% drop in operating income, according to the company’s latest financial statements, which warned: ‘Due to the 2016 Kumamoto earthquakes that occurred in April, the suppliers of parts for Nikon, mainly in imaging products, were affected, and an influence on production and sales in the first half of the fiscal year is expected.

‘The Group is working towards early recovery of the supply chain to minimise the impact on the Group’s operations.’

Company performance is also expected to be hit by the previously reported delayed launch of new products and the negative impact of exchange rates.

‘As a result, 15% sales reduction and 23% operating income reduction are forecasted,’ the firm added.

Nikon reported strong sales of entry-level models such as the D5500 in Japan, China and Europe, but suggested that sales of its D750 suffered owing to a growth in competition for ‘mid to high-class cameras’ with ‘comparable’ specifications.

Total camera and lens sales dropped 14.8%.

Despite this, Nikon and its subsidiaries reported a 20.8% rise in net profit.