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Fiat's rival automaker is on the verge of bankruptcy. After the failure in sales of its vehicles, Fisker Ocean may soon leave the automotive market and close its doors for good.
Fisker, a rival car manufacturer to Fiat, may have its days numbered. According to information from the Portal Quatro Rodas, the automaker declared that the manufacturing of the Fisker Ocean remains at a standstill and assumes that there will be no more production due to a billion-dollar debt. Production was halted at the beginning of March and at the time, the break was only going to last 6 weeks, but the deadline has now passed.
Fisker's billion-dollar debt could lead the company to bankruptcy
A Fiat's rival car manufacturer released a note about the strike and also commented on the threat of a 400 million dollar reduction, equivalent to around R$2 billion in our currency. According to the brand, production is currently halted and its current outlook, recently released, assumes that there will be no more production.
In March, the troubled electric vehicle startup founded by Henrik fisker has hired bankruptcy consultants to help it with a possible bankruptcy filing, according to information from The Wall Stree Journal. The company produced around 10 units of the Ocean electric SUV and around half of them were sold.
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The product from Fiat's rival carmaker was launched at a time of reduced demand for electric cars in the North American market and has faced complaints about quality and service, a regulatory investigation into braking problems and a very negative review from one of the biggest appraisers in the world.
Nissan may be interested in helping Fisker emerge from bankruptcy
Fisker had to reduce its production in December due to weak demand and a sales model that wasn't working. O WSJ reports that Fisker wants to shift from a direct sales model to a dealership model, but it's unclear whether it can survive long enough to do so.
The company declared a debt of US$1 billion (R$4,97 billion) in its latest report, which means it will take a lot of sales of the model to re-establish itself. The startup also stated that it will not be able to develop new models without the help of a large manufacturer.
Rumors indicate that the Nissan could be interested, but there is no certainty what the Japanese company would gain from a deal with Fiat's rival car manufacturer.
Fisker shares fall 97% since initial public offering
Partner Magna, a contract manufacturing company that builds the Ocean alongside other products for older brands such as Mercedes-Benz, lists the Fisker deal as one of its financial risks.
The automaker's share price has fallen more than 97% since its initial public offering, as the Wall Street Journal points out. It doesn't have any new products close to production, and even ignoring the problems, most critics didn't find Ocean particularly appealing.
Because its manufacturing is outsourced to Magna in Austria, it does not have a production facility in the United States to serve as a major asset or to produce electric cars that qualify for the federal tax credit. The company is in stormy waters and, if the WSJ report is right, appears to be preparing the lifeboats.
