- Nissan’s debt rating has been reduced to junk status as the automaker faces an assortment of challenges.
- A Japanese group is reportedly trying to get Tesla to invest, but Elon Musk seemingly downplayed the idea.
- Foxconn is said to be eyeing a four-way deal that would include Nissan, Honda, and Mitsubishi.
Following the end of talks between Nissan and Honda, Moody’s has downgraded the struggling automaker’s debt rating to junk status. The financial research firm also revealed a negative outlook for the future.
Moody’s cited a variety of factors including a slowdown in China, high inventories, and large incentives in the United States. They also pointed to a lack of hybrids in America, which is a growing segment where Nissan is absent.
More: Nissan Scrambles To Cut $2.59B, Seeks New Partners After Honda Deal Fails
While the situation isn’t dire thanks to “substantial cash holdings,” Nissan has an assortment of weaknesses and is embarking on a restructuring program. According to Moody’s Dean Enjo, “The downgrade to Ba1 reflects the deterioration and expectation for continuing weakness in Nissan’s credit profile, most notably in its free cashflow and EBIT margin in its automotive business.”
In other Nissan news, the Financial Times reported that several high-profile Japanese officials and businessmen want Tesla to invest in the struggling automaker. This sounds like a pipedream, but the group appears to believe that Tesla could be interested in Nissan’s U.S. plants.
Tesla CEO Elon Musk seemingly downplayed this possibility in a tweet, suggesting their plants can’t easily be replicated elsewhere. As he stated, “The Tesla factory IS the product. The Cybercab production line is like nothing else in the automotive industry.”
While a Tesla rescue seems far-fetched, Nikkei reported that Foxconn has proposed a four-way tie up that would include Honda, Nissan, and Mitsubishi. However, with Nissan and Honda failing to see eye-to-eye, a larger and more complex deal is hard to imagine.
