Nissan May Sell Its Stake in Mitsubishi

The company is considering selling a 34 percent stake in the Japanese brand.

According to Bloomberg with reference to anonymous sources familiar with the situation, Nissan Motor Co. is exploring the possibility of not investing in Mitsubishi Motors Corp. If Nissan sells its stake (34 percent of the shares), it will lead to major changes in the Renault-Nissan-Mitsubishi Alliance.

Nissan May Sell Its Stake in Mitsubishi photo 2

Nissan may give up its stake in Mitsubishi over concerns that it will be difficult for the company to recover from the downturn caused by the coronavirus pandemic. Meanwhile, the automaker itself denies a possible sale of shares and assures that “there are no plans to change the capital structure with Mitsubishi”.

Earlier, Nissan released a report for the first half of the 2020-2021 fiscal year: a net loss of ¥330 billion ($3.1 billion) compared to a profit of ¥65.4 billion (about $620 million) a year earlier. Over the first six months of 2020, the company sold 1.699 million vehicles worldwide, down 32.1 percent from the same period in 2019. Nissan lowered its operating loss forecast for the fiscal year by 28 percent, to ¥340 billion ($3.25 billion).

As for Mitsubishi Motors, the sixth-largest automaker in Japan, the projected operating loss for the fiscal year will be approximately ¥140 billion ($1.3 billion).

A few days earlier, the fugitive Renault-Nissan-Mitsubishi Alliance CEO Carlos Ghosn spoke about the consequences of the coronavirus pandemic for the largest automakers. In his opinion, the auto industry is moving towards even closer consolidation.

Many companies will suffer, and those that don't have a vision will be absorbed by stronger car conglomerates

Ghosn said.

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