The Car Industry in Crisis: Nissan’s Desperate Struggle to Survive
The car industry is facing a tough period, but for Nissan, the prognosis is particularly dire. The Japanese automaker is struggling with sluggish sales, mainly in North America, which has led to disastrous results. In response, dealers are selling cars at a loss, and production has been slashed by 20%. The company has also cut 9,000 jobs and sold off a third of its stake in Mitsubishi.
Nissan is planning to cut production at its plants in Canton, Mississippi, and Smyrna, Tennessee, by 100,000 cars, affecting 13,000 workers. This is part of a larger restructuring effort aimed at saving $3 billion. However, the company’s financial situation is increasingly precarious, with an 85% drop in operating profit and a net loss of 9.3 billion Yen ($60.1 million) in the third quarter.
According to a senior official, Nissan has only 12 to 14 months to survive, and the company needs to generate cash from the Japanese and US markets. However, consumers in these countries are not buying, and increased competition from China is not helping. The company’s biggest shareholder, Renault, is also looking to offload its holdings, and Nissan is exploring the possibility of a new long-term investor, including longtime rival Honda.
In a surprising turn, Nissan has signed a partnership with Honda and Mitsubishi for long-term EV development, and the company is not ruling out a majority stake by Honda. While a merger with Honda may be the better move, it is still unclear whether it can save Nissan from its current predicament.
The article concludes that Nissan’s actions, including the ousting of former CEO Carlos Ghosn, have damaged the company’s credibility globally, and a merger with Honda may be its only hope for survival.
