Nissan is in a precarious financial situation, with reports indicating that the company has just ’12 or 14 months to survive’. The Financial Times highlights that Nissan is urgently seeking a reliable long-term investor, particularly as its Alliance partner Renault plans to reduce its stake in the automaker. A senior official at Nissan expressed concerns about the company’s future, stating the need for immediate action.
In a potential strategic move, Nissan is considering allowing Honda, which it partnered with earlier this year, to purchase some of its shares. Sources close to Renault suggested that a stronger partnership between Nissan and Honda could be beneficial, hinting at possible share sales to Honda. Renault has already decreased its stake in Nissan from 43.4% to below 36%, while maintaining a 15% voting interest.
Nissan’s financial woes are compounded by declining sales in crucial markets like the US and China. To combat this, the company has announced plans to introduce more ‘new energy vehicles’ in China and enhance its hybrid offerings in the US. Additionally, Nissan is set to cut its global production capacity by 20% and eliminate 9,000 jobs as part of efforts to stabilize its operations.
The latest reports indicate that Nissan’s operating profit for the first half of the fiscal year plummeted to just 32.9 billion yen, reflecting a meager profit margin of 0.5%. CEO Makoto Uchida has stated that while these restructuring measures may seem like downsizing, they are aimed at making Nissan leaner and more resilient. Uchida has also committed to a significant salary reduction, alongside other executives.
Despite these challenges, Nissan continues to maintain a collaborative relationship with Renault while exploring synergies with Honda. A recent memorandum of understanding between the two companies aims to discuss frameworks for electric vehicle development and shared technologies.
However, the relationship between Nissan and Renault has been strained in recent years, particularly following the controversial exit of former Nissan chief Carlos Ghosn. As Nissan navigates this tumultuous period, the potential for a partnership with Honda remains a point of interest, though historical independence desires from Honda and Renault’s influence complicate matters.
As Nissan attempts to restructure and adapt to a rapidly changing automotive landscape, industry observers will be watching closely to see how these developments will impact its future viability.
