Reuters
Several major Western media outlets have reported this, predicting the collapse of the Japanese company within a year. What could be the reason?
As the Financial Times writes, citing the company’s top managers, things are going very badly for the automaker, and Nissan has 12–14 months to find a strategic investor. If no such investor is found, the company will either liquidate itself or come under the umbrella of another Japanese company from the «big three». What’s the problem? How did one of the pillars of the Japanese auto industry reach this point?
The media, without delving too deeply into the process, mention the sale of Nissan shares by its consortium partner Renault, which had rescued the Japanese company in recent years. They also recall Nissan’s unsuccessful attempt to revive interest in its brand in its main market, the United States, by offering deep discounts. A shrinking market has led to sharp production cuts at Nissan’s main plant in Japan. In November, Bloomberg reported that Nissan planned to lay off about 9,000 workers worldwide and cut production capacity by 20%. The company also decided to sell 10% of its shares in another automaker, Mitsubishi Motors Corp. (it currently holds a 34% stake).
But these are all consequences. Similar problems experienced by other automotive giants indicate that there is a root cause — one that is not only creating difficulties, but is leading to a global reformatting of the global automotive market and the loss of the dominance to which everyone has become accustomed.
Western journalists, for obvious reasons, do not mention Nissan’s withdrawal from the Russian market and from joint projects with AvtoVAZ. But this is unfortunate, because the loss of the Russian market has undoubtedly also affected the German group Volkswagen, which has already announced a gradual reduction of 10,000 employees and the closure of several factories, including those in Germany. According to top managers of the German car giant, cited by Reuters, the company urgently needs to cut costs by more than 4 billion euros, and restructuring must take place in the next 3–4 years, otherwise «competitors will leave VW behind». «Any decision must reduce both overcapacity and costs. We cannot just put a band-aid on the problem and procrastinate. Later on it could seriously harm us», said Volkswagen CEO Thomas Schäfer, clearly restraining emotions that suggest an impending catastrophe.
For the time being, there is talk of completely closing two plants in Germany. The first is in Osnabrück, where Porsche cars are still produced. Beyond Germany, Volkswagen is also selling one of its plants in China, which is being bought by Chinese partners of the German company. And here we come to the root cause.
The Volkswagen plant in Ürümqi, the capital of the Xinjiang Uyghur Autonomous Region, produced the long-popular Volkswagen Santana, which the Chinese have loved since the 1990s. However, Chinese citizens have recently turned to domestic manufacturers, and the popularity of Western brands, once the stuff of dreams, is steadily declining.
Nissan has similar problems. Sales in China, the company’s second most important market, fell 24% in 2024, and by 5–10% worldwide. Nissan’s stock is down 27% this year, and S&P Global has downgraded Nissan’s credit rating to “junk.
On November 27, Bloomberg explicitly pointed out the main reason for what is happening in the global auto market. As China’s offensive against the global auto industry gains momentum, Japanese leaders in the sector are becoming some of the biggest victims, Bloomberg writes. Not only are Japanese manufacturers struggling to survive in the world’s largest market — China — but they are also being forced to retreat from the onslaught of Chinese brands worldwide. Sales of the five biggest Japanese brands in China are all down, with only Toyota holding on, although its sales are not growing this year for the first time in its history. In fact, the Japanese have already ceded their positions in Southeast Asia and Africa, where they dominated for decades, to the Chinese.
To see how this is happening, take the example of Indonesia, which never before had even a hint of cars from the world’s largest electric vehicle manufacturer, China’s BYD. In July this year, BYD opened its first showroom in Jakarta, and according to Bloomberg, it is now the fifth best-selling brand in Indonesia.
The fate of Japan’s «big three» is also on the agenda in Europe, where a battle over tariffs is underway. In essence, these tariffs will determine the survival of both German and Japanese automakers. The United States is currently protected from Chinese expansion by a 100% import tariff. But this situation ultimately threatens to put American sellers and producers at a disadvantage in global competition.
Whereas 20 years ago Japan sold 22% of the world’s cars and China only 1%, last year the Japanese controlled only 11% of global sales, while China accounted for 38%. By 2024, this ratio will shift even further in favor of Chinese automakers.
As a result, Chinese automakers produced a total of about 30 million cars last year, including about 10 million electric and hybrid vehicles. With exports of about 5.2 million units (1 million more than Japan), China has become the undisputed world leader and, as we can see, is not only expanding its lead over Japan and Germany, but also intends to decisively overtake the masters of automobile manufacturing. In January-August this year, Chinese exports reached 4.09 million cars. A revolution in the global auto market is on the horizon.
Russian consumers need only look around to see how and at whose expense this is happening. While Mercedes and BMW are sold in Russia at prices two to three times higher than Chinese premium cars, Russian buyers are increasingly turning their eyes to «made in China» vehicles. And those who overcome the prevailing negative attitude towards China’s automotive industry are discovering previously unseen features and qualities in cars from the Middle Kingdom. Let’s leave aside such excesses as seat massages, automatic interior scent systems, exclusive leather and other luxuries found even in mass-market Chinese brands. But isn’t it nice when, for example, a car has the kind of performance that only outstanding European sports cars can boast? Or when it obeys its owner’s voice commands to park itself, drive itself, and maintain its distance and course in city traffic or on a high-speed highway? Even better, Chinese cars are more modern and visually appealing, with all the innovations that their competitors lack.