The automotive company Nissan is seeking a new partner who can help it regain its position, which has weakened after the partial dissolution of its 25-year strategic partnership with Renault. Nissan's restructuring plan has not had the desired impact and is currently in talks with Honda to explore different options, even considering the possibility of ending the deal negotiations.
Nissan's financial crisis became more evident in November when it cut its annual profit forecast by 70 percent. Since the arrest of former president Carlos Ghosn in 2018, Nissan has struggled to regain its balance. Despite efforts, the company has not made significant progress in its restructuring.
Honda had proposed to acquire Nissan and turn it into its wholly-owned subsidiary; however, this idea faced strong opposition. Renouncing the alliance with Honda could be a risky bet for Nissan, as its outdated product line has negatively impacted its financial results.
The Nissan board is pressuring the CEO and other top executives to develop a more comprehensive restructuring plan, along with discussions with potential new partners. The company has sought a U.S. technology partner as the North American market remains crucial for Nissan, despite the worldwide sales slowdown.
Although Nissan's shares rose in Thursday's trading in Tokyo, the company's financial situation remains delicate. It has announced the need to lay off 9,000 workers and reduce its manufacturing capacity by 20%. This situation has complicated negotiations with potential interested parties, including Foxconn, the iPhone manufacturer, which has shown interest but has put its proposal on hold.
Amid these difficulties, the Nissan board will meet to formalize its decision, while the company prepares to present its third-quarter results. With a 94 percent drop in its net income during the first half, Nissan needs to take swift and effective action to ensure its long-term sustainability.
