Nissan’s Struggle for Survival: Desperate Plea for Support
Written by Kyoka Omori on 2nd December 2024
Nissan, the renowned Japanese car manufacturer, is grappling with a critical financial challenge and urgently seeking new investors to ensure its survival. A senior official revealed to the Financial Times: “We have only 12 to 14 months to navigate this crisis. The road ahead will be tough, and ultimately, we need both Japan and the US markets to start generating cash flow.”
Photo credit: Eric D ricochet69 / Alamy Stock Photo
The carmaker announced last month that it would cut 9,000 jobs across the world and 20% of its global production capacity as its global sales slump. The chief executive, Makoto Uchida, has taken a pay cut of 50% of his monthly salary since last month.
Amid its challenging situation, the chief financial officer, Stephen Ma, is set to step down from his position, according to Bloomberg. It is unclear whether he will leave the company or could be demoted, as this has not been formally announced yet.
The main factors of its collapse are the significant decrease in its sales in China and the US. In the US, there are hybrid cars in strong demand and the firm has not had a sufficient line-up. Competition with local manufacturers providing affordable vehicles has caused a drop in sales in the Chinese market.
Mr Uchida said: “This has been a lesson learned and we have not been able to keep up with the times. We weren’t able to foresee that hybrid electric vehicles and plug-in hybrids would be so popular.”
Nissan runs the UK’s largest car manufacturing plant in Sunderland employing 6,000 people there. With the job cut announcement last month, the car maker did not reveal which area would affect.
Japan’s second largest car manufacturer, Honda, could take a key role in making Nissan survive and could purchase a stake in the smaller company. However, sources said this is a ‘last resort’.
