Automakers
Mungo Soggot
AUTOMAKERS, the embattled manufacturer of Nissan and Fiat Uno cars, confirmed this week that a delegation from Nissan Japan had been in South Africa amid speculation that the Japanese were eyeing a substantial stake in the local company.
Industry sources said the Japanese company was seriously considering an acquisition, adding that if a deal were struck it would be in the next few weeks or not at all.
Nissan representative Johan Kleynhans said the possibility of Nissan Japan buying into Automakers was discussed on an “on-going basis” but he could not say whether it had been the subject of the latest meetings. The Japanese delegation had been in South Africa earlier this month, he said.
Kleynhans added that delegations from both Nissan Japan and Fiat visited the company frequently to discuss production plans and generally maintain links. He said since its listing last year the company had gone on record saying it would welcome an investment from Nissan Japan.
The acquisition by Nissan Japan of a major stake in Automakers would square with the investment policies of Automakers’ main institutional shareholder, Sanlam, which has indicated it wants to cut its investments in non-financial services interests to below 15% and sever all management links.
Sanlam chairman Marinus Daling told the Mail & Guardian recently that Sanlam, which has a 51% stake, was clearly disappointed in the performance of Automakers since its listing – the share, one of the Johannesburg Stock Exchange’s worst performers, has sunk as low as 214c from a post-listing high of 650c. He said Sanlam’s continued investment in Automakers had to be seen “in the context” of its recently stated investment policy. Nissan Diesel and Mitsui together have a 14% share in the company.
The acquisition would also come at a time when Automakers is coming under intense pressure from competitors, particularly in the entry-level car market. The group, whose share price was 244c at the time of going to press, recently announced a massive retrenchment programme aimed at 900 of its 4 800 workers.
The National Union of Mineworkers and the company have failed to agree on the retrenchment exercise in mediation. Reports this week said the union had applied for an urgent interdict, scuppering Nissan’s plans to issue retrenchment notices to 600 workers at the end of the month.
Among the union’s demands is a breakdown of senior executives’ salaries and the costs of running luxury country retreats the company bought at the time of the listing for its executives and clients.
Despite the company’s claims that the lodges were necessary for marketing, competitors such as Volkswagen, BMW and Toyota told the M&G they had no company-owned retreats.