Nissan could disappear within the next year or so if it fails to turn around its business prospects, according to an insider report.
The Japanese carmaker has been in dire financial straits for some time, with models being sold at a loss and job cuts piling up, but the situation may be even worse than the company has led on.
Two unnamed senior executives recently spoke with the Financial Times, where it was claimed that the manufacturer has just “12 to 14 months to survive.”
“This is going to be tough. And in the end, we need Japan and the US to be generating cash,” they said.
Looking for a solution
In early November, Nissan announced that it would eliminate 9,000 “redundant” job positions, lower its global production capacity by 20%, and re-adjust its profit outlook for the coming financial year.
In addition, its senior staff have all agreed to a 50% salary cut, including Nissan CEO Makoto Uchida.
These changes were decided upon following the company’s latest sales report, as its operating profit decreased by 303.8 billion yen (R34.9 billion) to just 32.9 billion yen (R3.7 billion) in the first half of 2024.
Further complicating matters is the fact that Renault – Nissan’s long-time alliance partner – is gradually reducing its stake in the company, having gone from a 43.4% to a 36% holding in 2023.
Nissan is likewise planning to reduce its share in its other alliance partner, Mitsubishi, paring back from 34% to 24% as part of an ongoing emergency turnaround plan.
Nissan is also trying to secure a new long-term anchor investor to fill the gap left by Renault’s declining equity support, which could take the form of a bank or insurance group.
On top of this, the automaker is finalizing a new memorandum of understanding with its Japanese rival Honda to jointly develop electric vehicles in an effort to recapture market share in important regions such as China.
Renault may make this process a lot easier, as it is considering selling its shares directly to Honda, consolidating a Honda-Nissan partnership that would “only be positive” for the French carmaker’s interests.
It is currently unclear how Nissan’s performance shortfalls will affect its operations in South Africa, including its production facility in Rosslyn, Pretoria, but the brand confirmed earlier this year that it has a global product offensive lined up over the coming years.
This includes no less than 17 different cars that will be sold in various regions from Europe to the Middle East, Oceania, and Africa.
South Africa is expected to get at least two new SUVs over the next few years should Nissan be able to stay afloat, in addition to updates to the carmaker’s existing catalogue like the Magnite, X-Trail, Patrol, and the locally-made Navara bakkie.
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