Toyota offered fiscal assistance to Nissan: report

NISSAN’S parlous financial state recently saw the 92-year-old Japanese automaker attempt to strike a partnership with Honda (and Mitsubishi) that foundered at the last minute on a technicality as to who was going to call the shots and who was going to be subsumed.

Down nearly $A7.0bn last financial year, Nissan is reportedly (still) in talks with Mitsubishi and Honda with a view to cut costs by various means including model sharing through joint manufacturing.

Apparently, the parties are not discussing forming a conglomerate or merger any time soon despite Nissan only this week seeking to raise some $A10.7b to repay debt.

In the background of all this, news has emerged that automotive giant Toyota was in the picture earlier this year after the Nissan/Honda/Mitsubishi merger talks failed, with media reports out of the US and Japan saying the Toyota began discussions with Nissan via a Toyota executive who reached out with an offer of assistance.

According to website enginepatrol.com this new information implicating the world’s largest automotive manufacturer means that Nissan may not have been entirely abandoned.

Quoting intelligence from yet another source, Mainichi Shimbun Newspaper, one of the major newspapers in Japan, enginepatrol.com said an un-named Toyota executive reached out to Nissan in February to offer support.

“The specifics of what that support entailed remain unclear, and neither company has publicly confirmed discussions of a potential partnership,” said the report.

“Still, it’s hard to ignore the strategic timing – Toyota may view Nissan’s current struggles as a potential opportunity.

“Toyota has a long track record of quietly expanding its influence through incremental investments as evident when it began acquiring a stake in Daihatsu nearly 60 years ago, starting with just 0.22 per cent.

“Over the decades, that stake grew steadily: 16.8 per cent, then 33.4 per cent in 1995, and a controlling 51.2 per cent by 1998. In 2016, Daihatsu became a wholly owned subsidiary of Toyota.”

enginepatrol.com said Toyota has followed similar strategies with other automakers, holding around 20 per cent of Subaru, and roughly five per cent each in Suzuki and Mazda.

“Clearly, the company isn’t shy about making strategic moves when the timing is right,” the report added.

Although no announcement has been made in relation to Toyota’s offer of assistance, Nissan’s current CEO, Ivan Espinosa, has previously expressed interest in collaborations with other automakers; and in the light of this weeks $A10.7b capital raising by Nissan to cover debt through the issuance of new corporate bonds and by selling assets, whether it accepts help from Toyota remains to be seen.

In all of this, one thing is certain: with an urgent need to scale back global capacity, rekindle flagging sales, refresh an aging line up, wrangle billions of dollars in fixed and variable cost cuts, pay off a mountain of debt, restore the company’s credit rating to above junk status and dig out of record red ink Nissan isn’t in a position to rule out the possibility of any future collaborations whatever form they may take.