Nissan Seeking to Sell Trading Subsidiary for $1 Billion

Matt Posky
by Matt Posky

Nissan is reportedly interested in selling a subsidiary responsible for the distribution of machinery, vehicle parts, and raw materials in an effort to further streamline the troubled company. While no announcement of deal has been made public by the ailing automaker, Bloomberg cited insider sources who claim the company has already invited firms to bid on the entirety of Nissan Trading.

According to those involved, a buyer could be selected as early as October. The sources also stated that the deal’s $1 billion target valuation includes assumed debt.

From Bloomberg:

Nissan Motor Co. is seeking to sell a wholly owned subsidiary that distributes vehicle parts and materials in a deal that may be valued at about $1 billion, as the struggling Japanese automaker seeks to slim down, people familiar with the matter said.

The company has invited private equity and trading firms to bid for 100 [percent] of Nissan Trading Co., according to the people, who asked not to be identified because the information isn’t public. The buyer may be selected by as early as October, according to the people. The target valuation includes assumed debt, they said.

While $1 billion is nothing to sneeze at, the trading unit generated revenue of 676.1 billion yen ($6 billion) in the fiscal year ending last March. Nissan probably could get more if it wanted, but times are tough. Presumably, it’s better to get a lump sum now. The automaker is also undertaking restructuring measures that include 12,500 job cuts, a measure it will hopes will transform the company into a leaner, more profitable manufacturer.

Nissan posted a dismal 12-month earnings report last March. Operating profit plunged 45 percent to 318 billion yen ($2.9 billion), while revenue fell 3 percent to about 11.6 trillion yen ($105 billion). Vehicle sales were down 4.4 percent globally. At the time, outgoing CEO Hiroto Saikawa claimed the company had hit “ rock bottom,” though he said he believed the company could turn things around after a couple years of hard work.

Saikawa has since resigned after admitting to receiving overpayment from an equity-linked remuneration scheme. He’s also vowed to repay the excess compensation, which he said was orchestrated by ousted and jailed former Renault–Nissan–Mitsubishi Alliance head Carlos Ghosn. Under the scheme, executives at Nissan earned bonuses tied to the automaker’s stock price. Saikawa claimed he originally presumed it was legal.

[Image: rmcarvalhobsb/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Conundrum Conundrum on Sep 18, 2019

    They must be desperate. Sell off a spare parts subsidiary? Hey, my dealer wants $40 for a nylon webbing trunk net. It would be $5.99 in a Walmart blister pack. There's big money in them thar spar parts, son! But, hey, if you can't afford to pay for dinner, needs must and all that. A regional article I read on Nikkei or somewhere, written as opinion by some non-Japanese guru for the English-language version, claimed that Nissan's personnel cuts disproportionately affected overseas personnel, while the home crew would see far fewer job losses by ratio. Yup, you cut the foreign contingent running your overseas factories, sell off the family jewels like a spare parts business, continue to churn out underperforming tin cans, and soon enough you're back like 1999, almost bankrupt. And that's when Carlos arrived to sort this confused lot of provincially-minded managers out. They proved to be rubes, so he robbed them blind so they say, but he also picked Nissan up off the floor for the best part of two decades. Kind of six of one, a half-dozen of the other. This incarnation of Nissan looks set to go down the tubes in double-quick time. But at least they can blame someone else, even if not plausibly. Face-saving is just SO much more important than running a viable business.

  • Thejohnnycanuck Thejohnnycanuck on Sep 18, 2019

    Hopefully they take that billion and use it to leverage their way out of their alliance with Renault. Two's company and three's a crowd. I believe Nissan and Mitsubishi alone could make a real go of it. And doesn't Nissan already sell more vehicles globally that Renault?

  • Analoggrotto Kia EV9 was voted the best vehicle in the world and this is the best TOYOTA can do? Nice try, next.
  • 3-On-The-Tree 4cyl as well.
  • Luke42 I want more information about Ford’s Project T3.The Silverado EV needs some competition beyond just the Rivian truck. The Cybertruck has missed the mark.The Cybertruck is special in that it’s the first time Tesla has introduced an uncompetitive EV. I hope the company learns from their mistakes. While Tesla is learning what they did wrong, I’ll be shopping to replace my GMC Sierra Hybrid with a Chevy, a Ford, or a Rivian — all while happily driving my Model Y.
  • 3-On-The-Tree I wished they wouldn’t go to the twin turbo V6. That’s why I bought a 2021 Tundra V8.
  • Oberkanone My grid hurts!Good luck with installing charger locations at leased locations with aging infrastructure. Perhaps USPS would have better start modernizing it's Post offices to meet future needs. Of course, USPS has no money for anything.
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