Nissan is going through a bit of a rough patch at the moment and is said to be preparing to sell a subsidiary specializing on the distribution of machinery, vehicle parts and raw materials, Bloomberg reports.
It is believed the Japanese car manufacturer us looking to slim down and save money, and expects to sell its subsidiary for approximately $1 billion. A number of private equity and trading firms have been invited to bid for Nissan Trading Co. and a buyer could be selected as early as October.
Also Read: Nissan Announces 12,500 Job Cuts After Profits Drop 95 Percent, Worst Results In A Decade
Nissan Trading Co. generated revenue of $6 billion in the fiscal year ending last month, and The Truth About Cars suggests the automaker could probably sell the subsidiary for more if it wanted to. However, it is clear that they believe now is the right time for a significant cash injection.
What makes this more urgent is the fact that Nissan saw its operating profit plunge by 45 per cent to $2.9 billion in the 12-month period ending March 31st, 2019, with vehicle sales also dropping by 4.4 per cent in the same period. Former chief executive Hiroto Saikawa said at the time that the automaker had hit "rock bottom" and blamed former leader Carlos Ghosn. After his own scandal involving excess compensation, Saikawa has also left the company.
In July, Nissan said it would cut 12,500 jobs worldwide following a 94.5 per cent decline in its net income for Q1 2019 and a sales volume drop of 6 per cent to 1.23 million vehicles.