Struggling Automaker Considers Major Changes, Including Possible Stake Sale to Honda
Nissan’s future hangs in the balance as financial struggles mount, with company executives warning the automaker has just “12 to 14 months to survive.” Speaking anonymously to the Financial Times, two Nissan executives painted a grim picture, citing declining sales, production cuts, and job losses as the company battles to stay afloat.
Financial Challenges and Drastic Measures
Nissan’s operating profit plummeted by 85% in the third quarter, resulting in a ¥9.3 billion ($60.1 million USD) net loss. In response, the company recently slashed over 9,000 jobs and reduced production by nearly 20%. While these measures aim to save $3 billion, insiders fear they may not be enough to reverse the tide.
Dealers are selling vehicles at a loss, further exacerbating the financial strain. Executives stressed the urgent need for cash generation in both Japan and the U.S. to stabilize the company.
Searching for Strategic Partners
Amid these challenges, Nissan is exploring the possibility of bringing in a new long-term investor, such as a bank or insurance group, to replace portions of Renault’s equity holdings. The company has also not ruled out selling a majority stake to longtime rival Honda, with whom Nissan recently partnered for long-term EV development alongside Mitsubishi.
Renault, which has shared a 25-year alliance with Nissan, is reportedly open to restructuring the partnership. An insider noted that a larger Honda-Nissan collaboration could be beneficial for all parties, including Renault.
The Road Ahead
Despite efforts to streamline operations and reduce costs, Nissan’s future remains precarious. With production and sales faltering in key markets like the U.S. and Japan, the company faces an uphill battle to regain profitability. As talks of a potential Honda partnership continue, the coming months will be critical in determining whether Nissan can steer itself back on track or whether a dramatic shift in ownership is on the horizon.
