Japan’s export credit agency to lend $2 billion to Nissan for US sales financing

Japan’s export credit agency to lend $2 billion to Nissan for US sales financing
Nissan, Japan’s third-largest automaker, is focusing on key markets as it pulls back from the rapid expansion led by ousted Chairman Carlos Ghosn. (Reuters)
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Updated 26 November 2020

Japan’s export credit agency to lend $2 billion to Nissan for US sales financing

Japan’s export credit agency to lend $2 billion to Nissan for US sales financing
  • The money should help the Japanese company sell cars in the world’s second-biggest automarket after China

TOKYO: Japan’s state-owned export credit agency has agreed to give Nissan Motor Co. up to $2 billion as part of a credit agreement to help it finance car sales in the United States.
The money is part of a $4.1 billion credit agreement for Nissan Motor Acceptance Corporation, a unit of Nissan North America, Japan Bank of International Cooperation (JBIC) said in a press release on Wednesday.
The money should help the Japanese company sell cars in the world’s second-biggest automarket after China by allowing it to provide customers with loans that they can repay in monthly instalments, the export credit agency added in the statement.
The United States “is an important market for Japanese automobile manufacturers. Sales finance has become an important tool in business strategy,” JBIC said.
“This case provides financial support for Nissan’s overseas business development,” it added.
JBIC has provided loans for overseas sales financing to other automakers, including a $78 million October agreement with Honda Motor Co. in Brazil, and one in September for Toyota Motor Corp. in South Africa. JBIC did not disclose the amount for that deal.
The latest agreement with Nissan is more than three times as much as a $582 million loan extended by JBIC in July to help it finance car sales in Mexico.
A JBIC spokesman said the government export credit agency applied the same lending standards as private banks.
Nissan, Japan’s third-largest automaker, is focusing on key markets as it pulls back from the rapid expansion led by ousted Chairman Carlos Ghosn.
It is looking to raise market share with new models in the United States, China and Japan as they rebound from a demand slump triggered by the COVID-19 pandemic.
“We have financing from a variety of different ways and JBIC is one of them,” a Nissan spokeswoman said.
This month, Nissan cut its operating loss forecast for the year to March 2021 by 28 percent, albeit still to a record of about $3.2 billion, helped by a rebound in demand, particularly in China.


Intel avoids outsourcing embrace, investigates hack of results

Intel avoids outsourcing embrace, investigates hack of results
Updated 22 January 2021

Intel avoids outsourcing embrace, investigates hack of results

Intel avoids outsourcing embrace, investigates hack of results

The incoming chief executive of Intel Corp. said on Thursday that most of the company’s 2023 products will be made in Intel factories but he sketched a dual-track future in which it will lean more heavily on outside factories.
The lack of a strong embrace of outsourcing from new CEO Pat Gelsinger drove shares down 4.7% after hours. Shares rose 6.5% during regular trade, when the results were released ahead of the close. The company said it was investigating “non-authorized” access to some of the results, with the Financial Times quoting its chief financial officer as saying the microchip maker had been hacked.
Intel also forecast first-quarter revenue and profit above Wall Street expectations, continuing to benefit from pandemic demand for laptops and PCs that have powered the shift to working and playing from home.
Gelsinger said he was “confident that the majority of our 2023 products will be manufactured internally” though he also said the use of outside chip factories is likely to increase “for certain technologies and products.”
Intel has been considering since last July whether to drop its decades-old strategy of both designing and making chips by turning for help on its central processing units, or CPUS, to “foundry” manufacturers. Those partners could be Taiwan Semiconductor Manufacturing Co. and Samsung Electronics. Intel’s manufacturing technology, called a 7-nanometer process, is expected in 2023.
“We didn’t get our answer on which foundries and when,” said Patrick Moorhead of Moor Insights & Strategy. “They pushed the can down the road.”
Kinngai Chan, analyst at Summit Insights Group, said Intel is not likely to outsource its flagship chips.
“Intel’s 14-nanometer chip transistor speed has always been faster than what any foundry can offer even at 7-nanometer,” Chan said. “We believe it will increase its use of external foundries over-time — just not for its large-core CPUs.”
Keeping manufacturing in-house means higher investments. Bernstein analyst Stacy Rasgon questioned whether Gelsinger, currently the chief executive of VMware Inc. who previously spent 30 years at Intel and announced his intention to return just last week, has had sufficient time to dig into the issue.
“It was pretty obvious they were trying to borrow his credibility” when Gelsinger endorsed Intel’s delayed 7-naonmeter technology, Rasgon said.
Intel’s decision coincides with US lawmakers having passed bipartisan legislation to fund US chip manufacturing. But the new law has yet to specify funding levels or recipients, and Forrester Research analyst Glenn O’Donnell said Intel might take the opportunity to solicit US government support for domestic manufacturing.
Boosted by a new high-end PC processor, Intel regained some momentum in the PC market, with volumes of PC chips rising 33%, faster than the 26% rise for the overall PC market, according to data from IDC.
Data center group sales, which powered Intel’s growth over the past several years, were $6.1 billion compared with analyst estimates of $5.48 billion, according to FactSet data.
But sales to cloud computing customers, some of the largest and fastest-growing purchasers of data center chips, were down 15% in the fourth quarter. Data center chip operating margins were 34% in the quarter, down from 48% a year earlier.
“We think (data center) operating margins are going to improve as we get toward the second half of the year, when we expect to see a rebound in cloud” chip sales, Intel Chief Financial Officer George Davis said.
The company also raised its dividend by 5%.
The chipmaker said it expects fiscal first-quarter adjusted sales of $17.5 billion and adjusted earnings per share of $1.10, both ahead of analyst consensus, according to IBES data from Refinitiv.
Fourth-quarter revenue of $20 billion and adjusted earnings per share of $1.52 also beat Wall Street targets.