Giant carmaker Nissan could face collapse in the next 12 months as Chinese carmakers increasingly dominate global markets, including Australia.
The Japanese car company, which employs 195 people in Australia, 7,000 in the UK and 17,000 in the US, has embarked on a huge cost-cutting program after suffering huge losses.
CEO Makoto Uchida will take a 50 percent pay cut and it has now been reported that CFO Stephen Ma will step down.
However, insiders fear the measures will not be enough as Nissan struggles to remain competitive with its Chinese rivals.
“The root of the problems stems from a wave of cheaper EV alternatives from China that are flooding the global market and stealing market share from the Japanese company,” Forbes reported.
It is suggested that the company is at risk of racking up the largest debt in its history by 2026, potentially owing up to $5.6 billion.
Mr Uchida said: ‘This has been a lesson learned and we have not been able to keep up.
“We were not able to foresee that hybrid electric vehicles and plug-in hybrids would be so popular.”
The Financial Times quoted a “senior official” at Nissan as saying: “We have 12 or 14 months to survive.” This is going to be hard. And in the end, we need Japan and the United States to generate cash.”
The boss of Nissan Australia has claimed some car brands will soon pack up and leave the country because the market is saturated.
In Australia, Nissan was the 10th most popular car brand in November, but it is feeling pressure from Chinese competitors including BYD, Chery, MG and Polestar, with dozens more to be launched.
Nissan Oceania boss Andrew Humberstone previously said there were likely to be 100 car brands in Australia within five years and that was almost double what the US and UK had.
“It is not sustainable to have, in five years, 100 brands on the market,” he told Car Expert.
‘There are already 69 or 70 of us and 12 more are yet to arrive. They say that 100 brands in the country within the next five years, it is a very, very complex market.
‘The business case doesn’t work, simple. Not working.’
Humberstone said Australians buying new cars, particularly from unestablished brands, could risk being left in the lurch if the company collapsed.
Chinese brand Great Wall Motors (pictured, its Tank 300 model) has been selling cars in the country since 2009, but will soon be joined by a host of new Chinese automakers.
The XPeng G6 is among the range of electric vehicles that will flood the Australian market
He said auto parts could become unavailable for specific models and the residual value of sales could plummet if the brand no longer had a presence in the country.
Humberstone said Nissan had no intention of leaving the country but was concerned about new car makers competing for sales.
‘We are a very strong brand. But actually, if you look at where we are, in terms of our market share, a number of questions arise because, arguably, we should be in a better position.”
US Cybersecurity and Infrastructure Security Agency CEO Brandon Wales also warned Australia to be wary of Chinese espionage due to the country’s increasing use of vehicles.
“It should receive – and deserves – a greater degree of scrutiny,” he told The Australian Financial Review.
National Senator Matt Canavan said China could not be trusted with electric vehicles if Chinese companies such as Huawei were banned from installing the 5G mobile network.
‘Given that we have banned China from building our 5G network, I find it strange that there isn’t more scrutiny about allowing China to control the vehicles we drive.
“In a 5G network there are at least as big risks as there would be in a vehicle traveling at one hundred kilometers per hour.”
Electric vehicles from little-known Chinese brands will compete with existing models from Tesla and Volvo
CHINESE CAR BRANDS ARE READY TO CHARGE AUSTRALIA AND COMPETE WITH NISSAN
Zeekr: This Chinese brand, whose name means ‘zero, evolutionary, electric and krypton’, has committed to bringing three electric cars to Australia by the end of 2025. The Zeekr X compact SUV will cost less than $60,000 and is expected to be available in October . .
Geely: The Chinese car giant could attract a lot of attention when it launches its Radar electric vehicle in Australia later this year. Called Riddara R6 in other markets, the electric rival to the Toyota HiLux could offer a range of up to 571 km.
XPeng: Three electric cars are expected from this manufacturer in Australia over the next three years, with the first model, the G6 SUV, due out in October. The price of the vehicle, which promises to reach speeds of 100 km/h in 6.2 seconds, will be announced in September.
Aion: The electric arm of automaker GAC, or Guangzhou Automobile Group, has committed to launching a battery-powered hatchback, similar in size to a Toyota Corolla, in 2025.
Jaecoo: Jaecoo, a luxury spin-off of the Chery brand, is expected to bring a mid-size SUV called the J7 to Australia this year. The vehicle has similar styling to the Range Rover and will be available in two- and four-wheel drive configurations.
Jump Engine: Expect to see two cars from this Chinese brand in Australia in late 2024. Its C10 midsize SUV and T03 small car, also known as a minicar, will herald their arrival.
Sky well: A competitively priced SUV from this brand is expected in 2024. Known as Skywell ET5 overseas, it will be sold as EVA 5 locally and promises a range of up to 300 miles and a price under $50,000.