Nissan is in a precarious financial situation, with reports indicating that the company may have only 12 to 14 months to survive unless it secures a stable long-term shareholder. The Financial Times highlights that Nissan is actively searching for partnerships with banks or insurance groups, as its current alliance partner, Renault, plans to reduce its stake in the company. A senior official from Nissan has expressed urgent concerns about the company’s financial future, stating, “We have 12 or 14 months to survive.”
Recent developments include Nissan’s partnership with Honda, which could potentially lead to Honda purchasing some of Nissan’s shares. A source connected to Renault mentioned that strengthening ties between the two Japanese auto manufacturers could be beneficial and that Renault is open to selling part of its stake to Honda.
Renault has already decreased its ownership in Nissan from 43.4% to below 36%, while maintaining a 15% voting stake. Additionally, Nissan has gained voting rights for its own 15% stake in Renault and will also reduce its stake in Mitsubishi from 34% to 24%.
Nissan’s sales have dropped significantly in key markets, particularly in the US and China. In light of declining sales, the company has announced plans to accelerate the introduction of new energy vehicles, including hybrids and electric models, in both China and the US. Earlier this month, Nissan revealed its intention to reduce global production capacity by 20% and cut 9,000 jobs to stabilize the business, following a sharp drop in operating profit for the first half of the Japanese fiscal year 2024.
CEO Makoto Uchida emphasized that these measures do not signify a reduction in the company’s ambitions; instead, Nissan aims to restructure and become more resilient. Uchida has also committed to a 50% pay cut, alongside other executives taking similar salary reductions.
Despite the challenges, Nissan continues to collaborate with Renault and has recently signed a memorandum of understanding with Honda and Mitsubishi to explore further opportunities in electrification and vehicle intelligence. The partnership between Nissan and Honda is set to involve sharing platforms, electric motors, inverters, and battery technology, with both companies agreeing on a product review system that encompasses not just electric vehicles, but also combustion-powered models.
While a merger between Honda and Nissan has long been a dream of Japan’s Ministry of Economy, past tensions and Honda’s desire for independence have hindered such developments. The alliance between Renault and Nissan, established in 1999, has faced numerous challenges, particularly after the controversial exit of former Nissan CEO Carlos Ghosn in 2018.
As Nissan navigates these turbulent times, the automotive landscape continues to evolve, with new partnerships and innovations shaping the future of the industry.
