Nissan is grappling with a series of critical challenges that are raising serious concerns about its future. Dealers are being forced to sell cars at a loss, production has significantly slowed, and recently, the company took the drastic step of laying off thousands of employees and selling off a third of its stake in Mitsubishi. However, these efforts may not be enough to turn the tide in time.
A new report paints a grim picture for the automaker, suggesting that Nissan’s days might be numbered. In an exclusive interview with the Financial Times, two anonymous executives from the company disclosed that Nissan could have as little as “12 to 14 months to survive.” They acknowledged the tough road ahead, stating that the company’s survival largely depends on the ability of its operations in Japan and the US to generate significant cash flow. “This is going to be tough. And in the end, we need Japan and the US to be generating cash,” they said, indicating the company’s vulnerability in these key markets.
In response to its financial struggles, Nissan is reportedly seeking a new long-term investor to help stabilize its operations. The company is in search of a large financial partner, such as a bank or an insurance group, to take over some of the equity stakes held by Renault. The possibility of its long-time rival, Honda, stepping in to take a majority share of Nissan has not been ruled out, with the company saying that “all options” remain on the table. Nissan recently entered a partnership with Honda (as well as Mitsubishi) to develop electric vehicles (EVs) over the long term, signaling the possibility of a deeper collaboration in the future.
Meanwhile, Renault, Nissan’s long-standing partner for over 25 years, is considering selling off some of its own shares to Honda. The French automaker is reportedly looking to restructure the alliance with Nissan, as it aims to adapt to changing market conditions. An unnamed source from Renault revealed that a larger partnership between Honda and Nissan would be beneficial for the French company, offering potential long-term advantages for the alliance.
Nissan’s financial difficulties have been exacerbated by weak sales in both the US and Japan, prompting the company to make further drastic cuts. Earlier this month, Nissan announced it would lay off over 9,000 employees, a move aimed at reducing costs amid declining revenues. At the same time, the company reduced its production by nearly 20% in an attempt to streamline operations and remain competitive. These measures come after a severe drop in Nissan’s operating profit, which plummeted by 85% during the third quarter of the fiscal year. As a result, the company posted a net loss of ¥9.3 billion (approximately $60.1 million at the current exchange rate).
In a bid to restructure and recover, Nissan estimates it will save up to $3 billion through these layoffs and production cuts. However, the automaker’s ability to recover will depend on the success of its restructuring efforts, along with strategic investments from new partners.
