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COVID-19 storm sees Japanese car companies looking for cash

By Tom Fraser, 11 May 2020 Car News

mazda coronavirus

Mazda and other Japanese carmarkers seek cash injections to weather COVID-19 storm

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.

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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.

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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.

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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.

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