Japanese car manufacturing giant, Nissan is reportedly facing a critical financial crisis, with insiders warning the company may only have 12 months to survive.
The automaker, which employs 7,000 people in the UK and 17,000 in the US, has launched an aggressive cost-cutting programme following substantial losses.
Last month, Nissan announced plans to eliminate 9,000 jobs and reduce its global manufacturing capacity by 20 per cent. The measures aim to slash costs by $2.6 billion (£2 billion) in the current fiscal year, amid declining sales in China and the US, its largest markets.
According to recent reports, in a bid to stabilise the firm, Chief Executive, Makoto Uchida, has taken a 50 per cent pay cut, while Chief Financial Officer, Stephen Ma is stepping down.
However, industry insiders have expressed doubts about the effectiveness of these steps, citing Nissan’s struggle to compete with rivals that have successfully capitalised on the growing demand for hybrid vehicles.
The challenges facing Nissan are compounded by uncertainty surrounding its strategic alliance with Mitsubishi and Renault.
Established in 1999 to cover European, Japanese, and US markets, the partnership appears to be faltering. Reports suggest Renault is considering reducing its financial stake in Nissan, a move that could leave the firm in need of government intervention to stay afloat.
According to DailyMail, two senior Nissan officials who spoke anonymously to the Financial Times suggested the company might require financial support from Japanese or US authorities in the coming year to avoid collapse.
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