Half of financing coming from government agency
Nissan still reeling from Ghosn and pandemic
The Japnese government is giving Nissan money to lend to Americans, says a new report. Giving them available in-house financing to provide loans to consumers in the world’s second-largest auto market.
Nissan is expecting a loss of about 340 billion yen, or about CAD 4.2 billion, which isn’t as bad as expected but is still causing financial troubles for the automaker. The US $2 billion (CAD 2.6b) comes from the state-owned export credit agency, says Reuters in its report. The total credit agreement for Nissan Motor Acceptance Corporation is US $4.1b (CAD 5.4b), said the Japan Bank of International Cooperation earlier this week.
According to the statement, “the money should help the Japanese company sell cars in the world’s second-biggest auto market after China by allowing it to provide customers with loans that they can repay in monthly instalments.” In short, it’s for loans and leases.
JBIC has provided loans for overseas financing to other Japanese automakers, including Honda of Brazil last month and for Toyota in South Africa in December. The report says that the government agency used the same lending standards as private banks would have.
Nissan is looking to pick up market share in the US, as well as China and Japan, still reeling from the rapid expansion the company underwent under former chair Carlos Ghosn. Under the ousted chairman, Nissan spent billions to expand its range and to move into new markets like India, Russia, and Southeast Asia, where sales did not meet initial expectations. Reports from before the pandemic suggested Nissan plants were operating well under capacity, which does not bode well for profitability.