Nissan's Financial Crisis Is More Severe Than Anticipated, and the Consequences Are Ongoing | Carscoops

      The troubled Japanese automaker is experiencing setbacks due to its restructuring efforts as part of a turnaround strategy.

      Nissan is poised to report its largest loss ever for the recently concluded financial year. The projected net losses are approximately $5 billion, a significant increase from a prior estimate of $561 million. Nissan has walked away from merger negotiations with Honda and is in the process of restructuring the organization.

      How are your finances? Are you relying on overdraft? A few thousand dollars in credit card debt? It could be worse; you could be Nissan, which is on the brink of revealing dire financial results, including an unprecedented net loss of about $5 billion for the fiscal year that wrapped up in March.

      While the complete earnings report will not be available until May 13, the automaker has already indicated that it anticipates a net loss of ¥700-750 billion ($4.91-$5.26 billion) for the year ending in March, having initially estimated a much smaller loss of ¥80 billion ($560 million). This would signify the largest deficit in the company's history.

      The automaker attributes its significant drop into the red to impairment charges, which refer to the decrease in the value of assets listed in the company's financial records. Nissan has recorded ¥500 billion ($3.5 billion) in charges related to operations in North America, Latin America, Europe, and Japan, and additionally indicates that there will be ¥60 billion ($420 million) in further restructuring costs.

      Nissan is undergoing extensive restructuring to remain viable after $60 billion merger discussions with Honda collapsed. Although initial negotiations appeared promising, they faltered in February, with sources revealing that Nissan entered the discussions expecting to be a comparable partner but withdrew when it became clear Honda intended to position Nissan as a subsidiary.

      Despite the breakdown in merger discussions among Nissan, Honda, and Mitsubishi in February, the three manufacturers have stated their intention to continue collaborating on electrification and software development as part of a joint effort to remain competitive in the electric vehicle market, particularly against their Chinese competitors.