It seems the financial situation is dire at Nissan as the company’s scrambling to drum up investor cash with just a little over a year “to survive,” according to The Financial Times. A reporter spoke to a Nissan executive close to the matter, who learned that Nissan is currently looking for a new “anchor investor” to help establish financial stability over the next year or two after Renault, the Japanese automaker’s French partner, announced plans to sell some of its equity shares.
“We have 12 or 14 months to survive,” the unnamed Nissan executive told The Financial Times in a recent interview. The Renault-Nissan Alliance is currently hemorrhaging cash and to reduce its losses, Renault is reportedly looking to sell off some of its equity holdings to source some extra funding for future investments and projects. As of the report, the conglomerate is considering “all options,” including the possibility of selling some of those shares to Honda, which suggests that Honda could be a part owner of the Renault-Nissan alliance.
Honda Could Become A Shareholder Of Nissan And Partner In Electric Vehicle Development
Renault-Nissan is currently in the process of restructuring its alliance with Nissan, a partnership that just recently turned the age of 25 years old, after the two joined forces back in 1999 to cooperatively research, develop, and produce automobiles. The partnership roots its foundation on the basis of saving Nissan from bankruptcy at the time.
The sale of equity shares would most likely come out of Renault’s ownership portion of Nissan, which may potentially be sold to Honda. The cause of Renault-Nissan’s restructuring is reportedly due to a sharp decline in sales in the U.S. and Chinese market.
Although Nissan and Honda have endured years as competitors, another executive close to the situation on the Renault side of the conglomerate remained optimistic, commenting that the Nissan and Honda partnership could “only be positive” for the situation. But others on the Nissan side reportedly downplayed the possibility of a Nissan and Honda partnership, further noting that it would be a “last resort.” Honda denied any comment on the matter.
This isn’t the first time Nissan broke its competitive walls with Honda as, earlier this year, the two companies entered talks about teaming up to develop electric vehicle technology and its related software in order to become more relevant against the huge electric vehicle competition from China. However, fueling the uncertainty for the future was the recent re-election of U.S. president, Donald Trump.
“This is going to be tough. And in the end, we need Japan and the US to be generating cash,” the Nissan executive commented. The unnamed executive also acknowledged that Nissan missed the boat on the recent boom and increase in demand for gas-electric hybrid vehicles and the company’s looking to jump onto the hybrid bandwagon with some of its near-future vehicles.
The situation was exacerbated by the fact that even Nissan and Renault had their disagreements, particularly over specific share percentages over each other’s company in the alliance, as well as executive voting rights in terms of making overall and large decisions within the partnership.
“The partnership with Honda is strategically very important, and we hope to accelerate the realization of the results of our activities through regular progress at the management level of both companies,” another unnamed Nissan executive commented, noting that the partnership takes some inspiration from Stellantis and their recent partnerships from the merger of Fiat-Chrysler Automobiles and France’s Peugeot-Citroen corporation, PSA.
Source: The Financial Times
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