Nissan Reduced to Junk Rating Amidst Widespread Speculation of Partnerships | Carscoops

      Nissan is on the lookout for a partner, with recent speculations mentioning potential interest from Tesla to Foxconn.

      The company’s debt rating has been lowered to junk status as it encounters numerous difficulties.

      There are reports of a Japanese consortium attempting to persuade Tesla to invest, although Elon Musk has seemingly minimized this prospect.

      Foxconn is reportedly considering a collaborative deal involving Nissan, Honda, and Mitsubishi.

      After negotiations between Nissan and Honda fell through, Moody’s downgraded Nissan’s debt rating to junk status and provided a negative outlook for the company’s future.

      Moody’s noted several reasons for this downgrade, including a slowdown in the Chinese market, high inventory levels, and significant incentives being offered in the United States. They also highlighted Nissan's absence in the growing hybrid market in America.

      More: Nissan Works to Reduce $2.59B in Costs, Seeks New Partners After Honda Negotiations Collapse

      While the situation isn't critical due to "substantial cash reserves," Nissan does face several vulnerabilities and is initiating a restructuring plan. Moody’s Dean Enjo stated, “The downgrade to Ba1 reflects the deterioration and expectation for ongoing weakness in Nissan’s credit profile, particularly in its free cash flow and EBIT margin within its automotive division.”

      In other updates regarding Nissan, the Financial Times indicated that a group of prominent Japanese officials and businessmen is advocating for Tesla to invest in the struggling manufacturer. Although it may seem unrealistic, they believe that Tesla might have an interest in Nissan’s production facilities in the U.S.

      Tesla CEO Elon Musk has seemingly downplayed this possibility on Twitter, suggesting that their factories are unique and cannot be easily replicated. He remarked, “The Tesla factory IS the product. The Cybercab production line is like nothing else in the automotive industry.”

      While the idea of Tesla coming to the rescue appears unlikely, Nikkei reported that Foxconn has suggested a four-company alliance that includes Honda, Nissan, and Mitsubishi. However, given the lack of alignment between Nissan and Honda, envisioning a larger and more complicated deal seems challenging.