Nissan "May Not Survive" Beyond 2025 | Vantage with Palki Sharma — Transcript

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1. 0:03Our next story is about the fall of an
2. 0:04icon. The automaker Nissan, it used to
3. 0:07be everywhere at one point. In the Fast
4. 0:10and Furious movies, in console games,
5. 0:13and in magazines and toy sets.
6. 0:15But now Nissan is on life support. The
7. 0:17company may not survive beyond 2025.
8. 0:21And who is saying this? Senior
9. 0:23executives at Nissan, they say the
10. 0:24company can survive up to 12 or 14
11. 0:27months. It needs to find a major
12. 0:29investor by then.
13. 0:31If not, Nissan could go bankrupt. The
14. 0:34CEO has also admitted that hard times
15. 0:37are ahead.
16. 0:38His name is Makoto Uchida. He's planning
17. 0:41to cut 9,000 jobs. He will also reduce
18. 0:44production capacity by 20% plus he's
19. 0:46taking a pay cut himself.
20. 0:49The CEO is forfeiting half of his
21. 0:51salary.
22. 0:53All of this is expected to save $2.6
23. 0:55billion in costs. It's a big figure, but
24. 0:58it's not going to be enough.
25. 0:59So tonight we're focusing on three
26. 1:01questions. How did things go wrong with
27. 1:04Nissan? What does their future look
28. 1:06like? And what does it say about the
29. 1:08auto market in general?
30. 1:11Let's start with Nissan. It was founded
31. 1:13in the year 1911 in Japan. Today they
32. 1:17are the ninth biggest auto company in
33. 1:19the world. In many ways Nissan was ahead
34. 1:21of its times. They introduced the first
35. 1:23mass market electric vehicle back in
36. 1:252010, the Nissan Leaf.
37. 1:28They also had a sizable foothold in
38. 1:30China and the US, their two main
39. 1:31markets.
40. 1:33But how did things go so wrong?
41. 1:36Well, Nissan faced three main problems.
42. 1:37The first was leadership. For almost 18
43. 1:40years the company was led by one man,
44. 1:42Carlos Ghosn.
45. 1:44But in 2018 he was arrested in Japan. He
46. 1:47was accused of financial fraud at
47. 1:48Nissan.
48. 1:49Ghosn was placed under house arrest, but
49. 1:52he later escaped to Lebanon and that too
50. 1:54by hiding himself inside a box on a
51. 1:57plane.
52. 1:59Clearly, that episode destabilized
53. 2:00Nissan. Gone's successors could not
54. 2:02crack the code, so leadership or the
55. 2:04lack of it was a major problem.
56. 2:06The second problem was a failed bet on
57. 2:09EVs. Like I said, Nissan had EVs in
58. 2:112010, but they could not keep up with
59. 2:14Tesla or their Chinese rivals. The
60. 2:16design, the technology, all of it was
61. 2:18slightly outdated.
62. 2:19Plus, Nissan did not have hybrid models.
63. 2:23These are cars that use both fuel and
64. 2:24batteries. That's why hybrid. A lot of
65. 2:27customers find EVs too expensive, so
66. 2:29they buy hybrids instead.
67. 2:31But Nissan could not tap into that
68. 2:33market, either.
69. 2:34As a result, sales plunged. Nissan sold
70. 2:383.3 million vehicles last year, which is
71. 2:4040% down from 2017. Same with the share
72. 2:44prices. Nissan is almost 47% down in the
73. 2:47last last 5 years. It has lost 30
74. 2:49billion dollars in market value in under
75. 2:52a decade.
76. 2:54Then we come to problem number three.
77. 2:56The loss of a major partner and
78. 2:58shareholder.
79. 3:00The French automaker, Renault.
80. 3:02Renault saved Nissan from bankruptcy in
81. 3:041999. They bought a 43% stake in Nissan.
82. 3:10But 25 years later, Renault is leaving
83. 3:12the partnership. They're selling their
84. 3:13stake, which has left a big financial
85. 3:16hole.
86. 3:17Now, those are the three reasons for
87. 3:18Nissan's downfall. Leadership issues,
88. 3:21inability to compete with modern EV
89. 3:23makers, and the exit of a long-time
90. 3:25partner. That is why they're sinking.
91. 3:27Which brings us to the second question.
92. 3:29What does the future look like?
93. 3:31Well, simply put, Nissan needs to find a
94. 3:33new investor. Someone who can scoop up
95. 3:35the Renault shares. Someone who can
96. 3:36inject some cash to keep things running.
97. 3:39And a number of names are doing the
98. 3:40rounds. Among them is Honda.
99. 3:42Nissan and Honda already have an EV
100. 3:44partnership. Perhaps that could evolve
101. 3:46into something more, something bigger.
102. 3:48And now to the final question. What does
103. 3:50this say about the auto industry in
104. 3:52general?
105. 3:54That is going through a churn, that much
106. 3:56is clear. The old boys are struggling to
107. 3:57keep up with the new ones. By old boys,
108. 3:59I mean the likes of Volkswagen and
109. 4:01Nissan.
110. 4:02The new ones are Tesla, BYD, Rimac.
111. 4:07Volkswagen has reported a 60% drop in
112. 4:09profits. They're thinking about shutting
113. 4:11down three plants in Germany. Another
114. 4:14victim is Stellantis, the makers of
115. 4:16Jeep, Fiat, and Citroën.
116. 4:19Their car sales were 20% down compared
117. 4:21to last year.
118. 4:23So, the Stellantis CEO resigned on
119. 4:24Sunday. Meanwhile, the newer car
120. 4:26companies are thriving.
121. 4:28Just look at the top five auto makers by
122. 4:30market value today. Tesla is at number
123. 4:32one, BYD is at number three. You have
124. 4:35Ferrari at number four, but they don't
125. 4:36count as a mass market car. So, going
126. 4:38forward, expect major changes in the
127. 4:40auto sector. Government regulations are
128. 4:42changing, customers are changing, and so
129. 4:45is automotive technology. Companies that
130. 4:47adapt will end up surviving. Those that
131. 4:50do not will perish or be gobbled up.
132. 4:53Let's see which fate awaits Nissan.