Japanese automaker Nissan is grappling with severe financial difficulties, with two senior executives warning that the company has only 12 to 14 months to survive unless a long-term investor steps in, according to an anonymous interview with the Financial Times.
Amid rumors of a potential acquisition by Honda, Nissan has been exploring partnerships to secure its future.
Earlier this year, Nissan and Honda announced a wide-ranging collaboration, raising speculation that Honda may take control of Nissan. Such a move could align with Renault's plan to reduce its stake in Nissan, potentially forming an expanded alliance between the three automakers.
Nissan recently announced layoffs affecting 9,000 employees, about 7% of its workforce, alongside a 20% reduction in production due to declining sales in the U.S. and Japan. Initially planned to last until December, the production cuts have now been extended through March.
The company's operating profit plummeted by 85% in the third quarter of 2023. Nissan has initiated cost-cutting measures aimed at saving $3 billion. “It’s going to be tough. We need the U.S. and Japan to generate cash for the company,” the executives said.
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In addition to reducing production, Nissan plans to significantly scale back its 34% stake in Mitsubishi Motors to raise cash, though analysts question whether this will be enough. Renault, which acquired a controlling 43% stake in Nissan in 1999 to save it from bankruptcy, recently cut its holdings to 36% and intends to reduce them further to 15%.
The challenges facing Nissan underscore the upheaval in the global automotive industry, as legacy manufacturers are forced to invest heavily in electric vehicle production while competing with emerging Chinese automakers in key markets like Europe and China. Whether Nissan will be the first major casualty remains uncertain, with critical months ahead.