JUNK RATING
Nissan’s shares have shed more than 40 per cent of their value over the past year, and in March, the company’s then-CEO Makoto Uchida said he was stepping down.
Meanwhile ratings agencies have cut Nissan’s credit rating to junk, with Moody’s citing “weak profitability driven by slowing demand for its ageing model portfolio”.
This financial year has not proved any easier so far – since April, the United States has imposed a 25 per cent surcharge on all imported vehicles.
Bloomberg Intelligence analyst Tatsuo Yoshida told AFP ahead of Thursday’s profit warning that Nissan would be the most severely impacted by the US tariffs of all major Japanese automakers, calling the impact “huge”.
Last year, Nissan generated 30 per cent of its revenues in the United States, selling 924,000 vehicles there, 45 per cent of them imported from Japan and Mexico.
The company could try to sell more cars in other regions, such as Southeast Asia, but Yoshida warned that “if this situation goes on forever, it can be a death blow for Nissan, in a sense that it will run out of cash and default”.
But if this happens, he expects a financial partner to come to the rescue, either Honda or a technology firm like Apple.
In February, Nissan shares briefly surged on a reported push to bring Elon Musk’s Tesla on as an investor.
Reports in December said Taiwan’s Foxconn, which assembles iPhones and wants to move into cars, had approached Nissan to buy a majority stake.
It then reportedly asked Renault to sell its 35 per cent stake in Nissan, the legacy of a bumpy alliance with the French group dating back to 1999.
