A new report reveals are that Nissan has applied for a line of credit of 500 billion yen, equivalent to $4.6 billion USD, from major lenders after sales of the company’s models crashed in the wake of the coronavirus outbreak. This comes courtesy of Reuters, which cited two sources familiar with the case.
Like all automakers, Nissan has been hit hard with the outbreak and government lockdowns virtually wiping out demand and bringing vehicle production to a near-standstill. The added problem for the Japanese manufacturer is that it was already in a vulnerable position compared to other manufacturers even before the crisis.
As has been widely reported in recent months, after years of aggressive growth under the reign of Carlos Ghosn, the firm’s sales have fallen substantially in the last two years. Add to that the fact that Nissan currently offers an aging lineup and you have all the elements to explain the precarious position in which the manufacturer finds itself.
The year 2020 was shaping up to be a crucial one for the company with the arrival of new generations of models on the market. Last December, we took part in the launch of the 2020 Sentra in California, and the next edition of the Rogue SUV, the brand’s best-selling model, is set to make its debut before the end of the year.
Nissan is seeking the funding in anticipation of the possibility that the impact of the coronavirus on production and demand may continue for an extended period of time, according to one source. Those who spoke with Reuters did so on condition of anonymity because they are not authorized to speak to the media. As of now, Nissan had not commented on the report.
Japanese business daily Nikkei had reported earlier that Nissan is seeking a line of credit from Mizuho Financia, as well as from two other major commercial banking groups and the Business Development Bank of Japan.
As of December, Nissan had the equivalent of $6.2 billion USD in accumulated debt on its automotive operations, according to the firm’s data.