Nissan is reportedly in a critical financial situation, with sources indicating that the company has “12 or 14 months to survive” unless it secures a long-term investor, like a bank or insurance firm. The urgency comes as Renault, Nissan’s Alliance partner, looks to decrease its stake in the company. In a potential move to stabilize its finances, Nissan is considering allowing Honda to purchase some of its shares, following their recent partnership announcement in August.
Renault has already cut its stake in Nissan from 43.4% to below 36% and plans to continue reducing it. Meanwhile, Nissan has also gained voting rights for its own 15% stake in Renault while announcing a reduction of its stake in Mitsubishi from 34% to 24%.
Sales in the crucial U.S. market have significantly declined for Nissan, and the company is also facing challenges in China. In retaliation to these sales drops, Nissan is accelerating the rollout of new energy vehicles, including hybrids and electric models in both China and the U.S.
To address these financial woes, Nissan has announced a plan to cut global production capacity by 20% and reduce its workforce by 9,000 jobs. The company’s operating profit has plummeted, leading to an operating profit margin of just 0.5%. CEO Makoto Uchida has stated these measures are aimed at restructuring the company to become more resilient rather than shrinking it.
In August, Nissan and Honda signed a memorandum of understanding to explore further collaboration on vehicle electrification, which may include platform sharing and the development of a next-generation software-defined vehicle platform. This partnership aims to create synergies that could provide new business opportunities for both companies.
Despite these efforts, the historical tension between Renault and Nissan persists, particularly since former CEO Carlos Ghosn’s departure in 2018 amid allegations of financial misconduct. The relationship has been complicated by Renault’s controlling stake in Nissan and Honda’s desire for independence, which has hindered any potential merger plans.
As Nissan grapples with these challenges, the outlook for the company’s future remains uncertain, raising questions about its ability to navigate the current automotive landscape effectively.
