Mitsubishi and Nissan seek emergency assistance

Japan’s fiscal year ended on March 31, with worst for automakers in the last quarter, which is the first for 2020. And if Mitsubishi had planned $ 47 million in revenue before, they’ve undergone a turnaround and now the company has announced losses of $ 235 million.

To compensate for the losses, the company announced that it was seeking emergency financial assistance, from government loan organizations, private banks and outside investors. Mitsubishi expects to obtain a loan from the Japan Development Bank, with the total amount necessary to save the manufacturer about 4.6 billion.

Falling into this position is not new to the company. After the scandalous emissions scandal of the ek-wagon and ek-space car models and their versions of Nissan Dayz and Nissan Dayz Roox, the company ended fiscal year 2016 with losses of $ 1.8 billion. Nissan fell 34 percent to gain control of Mitsubishi.

Nikkei experts believe that the main cause of the company’s distress is poor reserves. They are at pre-crisis levels in 2008. At the same time, Toyota has taken action and strengthened its stocks, thus meeting the coronavirus pandemic without having to seek outside help.

Nissan, which is a partner of Mitsibishi in its alliance with Renault, is also in a difficult position. The company expected revenue of $ 1.5 billion, but instead reported losses of $ 890 million. The main reason was a 42% drop in sales in March. The company has estimated that the same amount is needed as Mitsubishi needs: $ 4.6 billion to get out of the crisis. Therefore, Japanese public and private banks will seek help.

The situation with Mitsubishi is more difficult than that of Nissan, since the company is not represented in the United States and sales in Europe are quite small. Banks in Japan are already up and running, as is the country itself, which has raised more than $ 1 trillion, and some of them will go to support the business.

Photo: Mitsubishi