They used to say “When America sweep sneezes, the whole world catches a cold”. Well, what happens when China catches coronavirus? The whole world goes into meltdown it would appear. And particularly the Nissan Renault alliance.
Shortly after announcing the appointment of its new chief executive, Luca de Meo, Renault announced its first loss in at least a decade. And to rectify it, it is planning a radical $2.2 billion cost-cutting restructure to put it back on the right track.
Losses were exacerbated by its fairly large holding in Nissan, who performed even worse than its partner. This meant that Nissan, who had contributed over €1.5 billion in 2018 to Renault’s bottom line, produced €1.3 billion less last year. Investors are not impressed, and Nissan’s share price plummeted nearly 10% on the news. The company is now valued less then much smaller marques, like Subaru and Suzuki. The last three years have not been kind to it, and its share price is down 19% this year, after a decline of 28% last year and 22% in 2018.
No wonder, then, they are suing former Chief Executive Carlos Ghosn for $90m for his alleged behaviour and misdemeanours with the company over the past decade. I guess they need every penny they can get.
When just one country like China represents a quarter of global vehicle production, then if analysts are predicting at least a 5% fall in the Chinese market (remember it normally climbs between six and 10% a year, so that might be 15% behind expectations) then everybody gets worried. Expect a slew of vehicle offers in the UK in the coming months, as European manufacturers try to divert production elsewhere.
And VW would probably like to divert attention elsewhere as well. Especially in Germany, where consumers who are suing them through a class action have turned down a settlement of nearly €1 billion so far. Negotiations are continuing, but the manufacturer once again looks set to lose another considerable amount of money, as the action continues. Not only that, the effect on its reputation in its heartland is probably incalculable. I suspect this is one they are going to have to settle quickly.
Have a great weekend, it’s probably best to leave that kite in the cupboard for at least another week.
I do not want people to be agreeable, as it saves me the trouble of liking them.
Jane Austen (1775 – 1817)
Age is mind over matter. If you don’t mind, it doesn’t matter.
Satchel Paige (1906 – 1982)
Lawyers spend a great deal of their time shoveling smoke.
Oliver Wendell Holmes Jr. (1841 – 1935)
There is no nonsense so arrant that it cannot be made the creed of the vast majority by adequate governmental action.
Bertrand Russell (1872 – 1970)
You can adjust all of your cookie settings by navigating the tabs on the left hand side.