Nissan to sell ¥150 billion of convertible bonds to fund turnaround
The proceeds will be used for investment in new products and technologies such as electrification and software-defined vehicles, the Japanese carmaker said in a statement Monday.
The company, which is facing a a huge loan repayment wall next year, is seeking to raise more than ¥1 trillion from debt and asset sales to keep operations on track, it was reported in May.
The stock fell the most in almost three months after the convertible bond sale was announced. The shares fell as much as 5.2% in Tokyo, before paring some of the losses to be down around 3% at 1:04 p.m. local time. The stock has tumbled about 40% in the past 12 months.
Nissan has sufficient capital of about ¥2.2 trillion in cash on hand and credit to last the next 12 to 18 months, Espinosa said in May.
The new CEO has announced plans to eliminate 20,000 jobs and close seven of Nissan's 17 plants by March 2028 after the company reported a ¥671 billion net loss for most recent fiscal year.
The measures follow the collapse of talks earlier this year to join forces with Honda. Those discussions ended in part due to disagreements about Nissan's willingness to make deeper cuts to production and personnel.
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Japan Times
an hour ago
- Japan Times
Xiaomi founder's bold EV bet is paying off where Apple's failed
Lei Jun, founder and chairman of Xiaomi, the only tech company to have successfully diversified into carmaking, couldn't resist. Speaking at a triumphant launch event in Beijing late last month for Xiaomi's second electric vehicle, a long-anticipated SUV, Lei pointedly mentioned Apple, which spent a decade and $10 billion trying to make a car before giving up last year. "Since Apple stopped developing its car, we've given special care to Apple users,' he said, noting that owners of the American giant's iPhones would be able to seamlessly sync their devices to Xiaomi's vehicles. The not-so-subtle dig was followed by a flex: Xiaomi then said it had received more than 289,000 orders for its new sport utility vehicle within an hour of its announcement, more than its first EV, a sedan launched in March 2024. Xiaomi succeeding where Apple failed has burnished Lei's reputation, made his company one of the most valuable in China and shaken up both the tech and automobile industries. The collapse of Apple's moonshot car program has only underscored the effectiveness of Xiaomi's grounded approach, which took inspiration from proven designs from Tesla and Porsche Automobil Holding while staying true to the affordable ethos that's made it a cult brand for Gen Z consumers. Crucially, it also launched into the most fertile EV ecosystem in the world — China. With state subsidies, existing charging infrastructure and a ready-made supply chain, Xiaomi had a structural tailwind Apple lacked. Xiaomi declined to comment for this story. Lei and Xiaomi's "charisma, brand recognition and ecosystem cannot be underestimated,' Yale Zhang, the managing director of Shanghai-based consultancy Automotive Foresight, said. "It's a big influence on young consumers who have filled their homes with Xiaomi products. When it comes time to buy an EV, they naturally think of Xiaomi.' But building cars is a far more complex, capital-intensive challenge than making phones or rice cookers. It requires mastering safety regulations, global logistics and production at scale, all while competing against legacy automakers with long histories and large model lineups. Any international expansion will also require navigating complex geopolitical landscapes. As one of the first tech giants to actually manufacture a car, Xiaomi is in uncharted territory. Apple's failings Apple's car project, internally dubbed Project Titan, failed in large part because it wasn't just an EV — it was at one point an attempt to leapfrog the auto industry with a fully autonomous, Level 5 self-driving machine. Its goals were lofty and the direction constantly shifting, the result being over a decade of effort with nothing to show. Lei, 55, was comparatively stingy with time and resources and staked his personal reputation on the endeavor, claiming that making cars would be his "last entrepreneurial project.' A Xiaomi SU7 electric vehicle on display in Shanghai on March 16 | Bloomberg Xiaomi's public narrative is that Lei and his team learned by visiting multiple Chinese automakers, including Zhejiang Geely Holding Group and Great Wall Motor, and talked to more than 200 industry experts in some 80 meetings. The reality is also that he used Xiaomi's reputation as an innovative consumer behemoth to get close to China's large carmakers and pick off their top talent. Geely and its billionaire founder Li Shufu welcomed Lei to the automaker's research institute in Ningbo in the months leading up to Xiaomi's announcement that it would enter the car business to discuss topics, including potential collaboration. It's Geely lore that Lei added the WeChat contacts of many staff at the institute, including then-director Hu Zhengnan. Hu later joined Shunwei Capital Partners, the investment firm co-founded by Lei. Recruitment tactics Xiaomi headhunters also courted Geely staff intensely, according to people familiar with the matter. While it's common for talent to move between companies in the same industry, it was unusual to see this level of aggressiveness around recruitment, the people said, asking not to be identified discussing information that's private. Geely didn't respond to a request for comment. Hu, known for his love of the German luxury marque Porsche, was one of the team members credited as being instrumental to developing Xiaomi's EV business, Lei said at the SU7 launch in 2024. Lei added that Hu left his previous employer after his contract ended. Other executives who joined Xiaomi came from companies including BAIC Motor, BMW, SAIC-GM-Wuling Automobile — the General Motors joint venture with SAIC Motor and Wuling Motors Holdings — and auto supplier Magna Steyr. Besides assembling top Chinese automaking talent, Lei made a prescient bet on investing in a self-controlled supply chain — insulating Xiaomi's operation from manufacturing vagaries. This came from painful lessons learned in Xiaomi's early smartphone-producing days, when external suppliers would cut off components unpredictably. In 2016, some members of Xiaomi's supply chain team displeased Samsung Electronics representatives and the South Korean firm threatened to halt supply of its industry-leading AMOLED screens. To mend the fractured relationship, Lei flew to Shenzhen to meet with Samsung's China head at the time. The pair drank five bottles of red wine during their dinner meeting, according to a Xiaomi company biography, and Lei also made multiple trips to Samsung's headquarters in South Korea to apologize and negotiate the resumption of supply. Representatives from Samsung declined to comment. After Xiaomi went into the carmaking business, it invested into almost all parts of the EV supply chain, from batteries and chips to air suspension and sensors. It pumped more than $1.6 billion via Shunwei or other Xiaomi-led funds into over 100 supply chain companies between 2021 and 2024, according to data compiled by Chinese analytics firm Zhangtongshe and Bloomberg. The components from some of the companies that Xiaomi invested in have ended up in its cars, such as lidars from Hesai Technology and onboard chargers and voltage converters from Zhejiang EV-Tech. A vlogger records video inside a Xiaomi SU7 Ultra electric vehicle at the MWC25 tech show in Barcelona, Spain, on March 3, 2024. | Bloomberg With the 10 billion yuan ($1.4 billion) it committed to the first phase of its EV venture, Xiaomi also built its own factory, rather than going down the contract manufacturing route that some Chinese makers, including Nio and Xpeng, did when they started out. "Among tech companies that now build electric vehicles, those who previously had hardware products seem to be more successful than those who only had software products or information services,' said Paul Gong, UBS Group AG's head of China autos research. Copycat allegations Despite its early success, there are many who argue Xiaomi's one hit car is copied from elsewhere — and that a sole successful vehicle does not a successful auto producer make. Lei's aggressive approach has also raised hackles in China's car industry. Yu Jingmin, vice president of SAIC's passenger car division, reportedly described Xiaomi's approach as "shameless' in a critique of the SU7 resembling Porsche. The SU7 has been colloquially dubbed "Porsche Mi' by netizens. SAIC didn't respond to questions about Yu's remarks. A Xiaomi YU7 electric SUV on display at one of the company's stores in Shanghai on June 5 | Bloomberg Xiaomi's design team, led by former BMW designer Li Tianyuan, has defended the SU7's aesthetics, emphasizing that the choices were driven by aerodynamic efficiency and performance benchmarks. In late March, there was another setback after a fatal accident involving the SU7. The car had its advanced driver assistance technology turned on before the crash, which afterward led to authorities reining in the promotion and deployment of the technology. The usually vocal Lei kept a low profile on social media for more than a month after the March accident. He returned to more active engagement in May with a missive that said this period of time was the most difficult in his career. Fortunately for Xiaomi, its consumer base is sticky. Known as "Mi Fans,' the loyal customers have played a pivotal role in the company's rise. Xiaomi cultivated this fandom early on by prioritizing user feedback and the grassroots allegiance has helped it build strong brand equity, especially in China. The SU7 has remained a top selling model even after the accident in March. Indeed, dealers have reported that nearly 50% of customers plump for the SU7 without comparing it to other brands. "A significant number of older consumers are buying the SU7 for their children, indicating that the model has built trust among more conservative buyers thanks to its safety and quality,' said Rosalie Chen, a senior analyst from investment research firm Third Bridge. Small scale Xiaomi has set a delivery target of 350,000 units in 2025, up from its previous goal of 300,000, buoyed by demand for the newly launched YU7 and a ramp-up in production. The starting prices for the SU7 sedan, at 215,900 yuan, and its SUV, at 253,500 yuan, make them competitive alternatives to models such as Tesla's Model 3 and Model Y. The EVs are also showing financial promise. Xiaomi posted record revenue for first quarter this year, driven by car and smartphone sales. Its EV division is expected to turn profitable in the second half of 2025, Lei said in an investor meeting in June. But even if the popularity of Xiaomi's EVs can spring beyond the company's devoted base, production is still on a much more boutique scale. China's top car brand, BYD, sold around 4.3 million EVs and hybrids last year, many overseas, while Tesla moved about 1.78 million vehicles globally. Toyota Motor Corp., the world's No. 1 automaker, sold some 10.8 million vehicles and boasts a lineup of approximately 70 different models. Lei doesn't seem to be prioritizing the mass market of below $20,000 yet, which drives significant volume and is where BYD dominates, Automotive Foresight's Zhang said. Without a lineup in that segment, Xiaomi cars will remain niche purchases for middle- to higher-income consumers and Xiaomi may face the same risks as Tesla, which is seeing its sales slump exacerbated by a narrow consumer base and limited models. Nonetheless, Lei seems buoyed by Xiaomi's early wins and is now looking at global expansion. Xiaomi will consider selling cars outside China from 2027, he said last week. Success or otherwise, the European Union, the U.S. and Turkey have all slapped tariffs on Chinese EVs, but Xiaomi wants to set up a R&D center in Munich and may test sales starting in European markets such as Germany, Spain and France when the time is right, Chinese media 36Kr reported in April. "Xiaomi is a latecomer to the auto industry,' Lei admitted on Weibo in June. But, he said, in a market driven by technology and innovation and the rising global influence of China's EV culture, "there are always opportunities for latecomers.'
Japan Times
4 hours ago
- Japan Times
Real wages fall for fifth straight month in May
Salary growth lagged inflation for a fifth straight month in May, with real wages falling the most in almost two years, according to government data released on Monday. Inflation-adjusted pay declined 2.9% year on year in May, with the inflation figure used for the calculation that month set at 4%. It was the biggest drop since September 2023. Overall nominal wages, including those for part-time workers, rose for a 41st straight month in May to an average of ¥300,141 ($2,069). But the pace of the growth has slowed in recent months. It was 2.3% in March, 2% in April and 1% in May. A major factor in the slowing of growth in May was an 18.7% drop in special pay, which includes bonuses. Base salaries, which show the underlying wage trend, rose 2.1% to ¥268,177 — the 43rd straight month of increases. Even though this year's spring wage negotiations ― known as shuntō ― achieved an agreement to increase wages more than 5%, a 34-year high, Japanese households are still being squeezed. Takahide Kiuchi, executive economist at Nomura Research Institute, wrote in a report Monday that there is still a large gap between the inflation rate and the growth of base salaries. 'It's becoming uncertain that the real wage growth will turn positive by the end of the year,' Kiuchi wrote. Rising food prices have squeezed Japanese households, leading to political parties coming up with measures to counter inflation to woo voters ahead of an Upper House election later this month. | Nico Phillips Japan's inflation is running at about 3% this year, far above the Bank of Japan's 2% target. Consumer inflation was 3.5% in May, with the price of rice more than doubling year on year. High inflation, especially the rising price of food, is a primary focus in the July 20 Upper House election. Political parties are eager to woo voters with inflation countermeasures, such as cutting consumption tax rates and distributing cash handouts. According to a poll by NHK last month, "rising prices" was the second most important issue for voters, following "social security and declining birth rate." The administration of Prime Minister Shigeru Ishiba has been desperately trying to bring down rice prices before the election. Farm minister Shinjiro Koizumi has been working on the issue and managed to achieve some success over the past few weeks. In addition to persistent inflation, U.S. tariffs are posing a risk to wage growth. The tariffs will likely lead to a slowing U.S. economy and pessimism at Japanese corporations, which will affect next year's spring wage negotiations, said Daiju Aoki, regional chief investment officer at UBS SuMi Trust Wealth Management in Tokyo. Japan and the United States are struggling to find common ground in their trade negotiations despite months of dialogue. Japan's priority is to eliminate a new 25% tariff on vehicles. Given that wage growth in the auto industry, a major driver of the Japanese economy, sets the tone for other industries, pay increases next year might decelerate if the tariffs significantly weaken Japanese automakers.
Japan Times
4 hours ago
- Japan Times
Lawson to let visitors use larger parking lots as paid car campsites
Major convenience store operator Lawson said Monday it will begin renting out parking spaces at its outlets to allow visitors to use them as an overnight car campsite for ¥2,500 ($17) to ¥3,000 per night amid a rising number of inbound tourists in the country. In certain Lawson outlets across the country — mostly in rural areas where they have large parking lots — visitors will be able to book spaces and pay for them online. Upon arrival, visitors can check in at the store, where they will be able to rent power cord reels as well as use the bathroom. The service will begin at six stores in Chiba Prefecture starting July 14 and will slowly be rolled out to more outlets elsewhere. The company is looking to target rural areas where there are public bath houses nearby, but not many hotels or other types of accommodation. This is the first time that a convenience store operator is opening up its parking lots for overnight stays. Typically, customers are allowed to park their vehicles at convenience store parking lots while they do their shopping. Lawson is allowing each visitor to book a block of two adjacent parking spaces at a time, which would accommodate not just regular cars but also recreational vehicles. Parking rules at the Lawson outlets will be in accordance with those for RV parks, as set by the Japan Recreational Vehicle Association (JRVA). The new service comes amid a surge in inbound tourists that is making it harder to book hotels and inns as well as making such accommodations more expensive. In 2024, there were over 650 million overnight stayers — including both domestic and foreign visitors — in the country, up 5.3% from a year earlier, according to the Japan National Tourism Organization. Foreign nationals who stayed overnight jumped 38.9% year on year to hit some 137 million people in 2024. Lawson's service could come in handy when events such as live concerts are held in rural regions, where accommodation options are limited. It is not uncommon for visitors to camp out in the parking lots of convenience stores in their vehicles without permission. Lawson is looking to capitalize on this by allowing such visitors to stay for a fee. RVs are also becoming more popular in Japan. Last year saw the highest ownership of such vehicles, at 165,000, according to the JRVA. This is more than a threefold increase from 2005 when the association first started taking count. There are over 14,500 Lawson outlets across the country and while the service is only suitable for bigger stores with large parking lots, the expansion of the service would give out-of-town visitors an affordable alternative to conventional accommodations.
