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They have requested financing in the sum of $2.8 billion.
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Nissan holds a 34% stake in Mitsubishi Motors.
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The loans are to help the company through the severe drop in demand for new cars at this time.
The car industry is, as we’ve stated many times, struggling as the global pandemic drags on. Even though many plants have returned to producing new vehicles, it may take a long while before demand picks up again. Mitsubishi Motors’ new vehicle sales in North America have been flat in a downward market which is good news. The bad news is that their reserves were close to crisis levels. This is why they are seeking $2.8 billion in loans.
Every carmakers is hurting at the moment and this includes Mitsubishi. Last year was a good year for the Japanese automaker as its sales were strong and held about 370 billion yen in cash and equivalents at the end of 2019. The sharp decline in worldwide demand for cars and SUVs has depleted these reserves and has forced Mitsubishi Motors to shop for 300 billion yen ($2.8 billion) in financing and loans from domestic and foreign lenders.
As a reminder, Mitsubishi Motors was “bailed out” in 2016 by Nissan following its falsified fuel-economy data. At the time, they joined what is now known as the Renault–Nissan–Mitsubishi Alliance.
