COVID-19 storm sees Japanese car companies looking for cash

Mazda is reportedly in talks to secure 300 billion yen ($4.3b AUD) in loans from three Japanese ‘megabanks’ in order to endure the fall-out from the coronavirus pandemic.

According to Reuters, the three banks were close to completing the deal over the weekend, with some funds already provided to the struggling Japanese carmaker.

Like many other manufacturers, Mazda was forced to cease production of some cars at its factories due to the outbreak of coronavirus.

It was already coming off a rough first quarter, having scaled back sales targets in Japan and North America (the latter makes up nearly a third of its global unit sales).

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The manufacturer now looks to bolster its cash reserves with this new injection in order to hunker down and wait out what it expects to be a prolonged sales decline.

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While Mazda seems big to Australians it is a relatively tiny outfit in other markets, so when it started cutting costs by limiting dealer incentives and boosting the price of core models in the US, the company quickly entered a sales downturn.

Mazda isn’t alone in asking for help to endure the coronavirus pandemic, with Toyota requesting a 1 trillion yen ($14 billion) credit line, and Nissan is after 500 billion ($7 billion) in financing.

American manufacturers Ford and GM have secured US$15.4 billion ($28b) and US$16 billion ($29b), respectively.

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Things are starting to look up in some markets that have eased back restrictions, but there’s no doubt the road ahead is a very long and arduous one for carmakers across the globe.