The entire auto industry may be in trouble, but Nissan's prognosis is particularly dire, one that is measured in months rather than years.
Sluggish sales, mainly in North America, have been a devastating blow to Japanese automakers. As a result, dealers sold cars at a loss and production was cut by 20%. Most recently, the company cut 9,000 jobs and sold a third of its Mitsubishi stock.
The Japanese automaker also plans to cut production by 100,000 vehicles at its plants in Canton, Mississippi, and Smyrna, Tennessee, which together employ about 13,000 workers.
But all this may be too little, too late.
door of death
It doesn't look good, at least on paper. Nissan's third-quarter operating profit fell 85%, with a net loss of 9.3 billion yen ($60.1 million at current exchange rates). The company announced on November 7 that its consolidated operating profit for the six months ending September was down more than 90% compared to the same period last year.
“We have 12 to 14 months to survive,” a senior official close to Nissan recently told the Financial Times. “This is going to be a tough situation, and ultimately Japan and the United States will need to generate cash,” he said.
Unfortunately, consumers in those countries simply don't buy the products. Increasing competition from China also doesn't help.
Economic slowdown in the United States
Nissan's cost cuts are part of a major restructuring effort to save $3 billion.
Adding to the uncertainty, major shareholder Renault is looking to sell its stake in the company. Nissan is reportedly looking for a new long-term investor, but has not ruled out the possibility of long-time rival Honda taking a majority stake. Nissan recently entered into partnerships with Honda and Mitsubishi for long-term EV development.
The Japanese automaker also plans to cut production by 100,000 vehicles at its plants in Canton, Mississippi, and Smyrna, Tennessee, which together employ about 13,000 workers. Among the models produced at these plants are Nissan's Pathfinder SUV and Frontier pickup truck.
lost trust
In my view, Nissan's mob-like tactics in ousting former CEO Carlos Ghosn damaged the company's credibility on the world stage. Mr. Ghosn previously spent 13 months in a Japanese prison. make a dramatic escape For Lebanon, it claims it was targeted because of the planned merger between Nissan and Renault.
In the end, a merger with Honda might be the better choice. If Japanese companies cooperate to make better cars, shareholders and customers will be happy. More importantly, it may be the only option left for companies that are rapidly running out of options.
