Nissan is looking for an anchor investor to help it through the make-or-break 12 months

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Nissan is looking for an anchor investor to help it survive a year in which longtime partner Renault sells its stake in the troubled Japanese automaker.

Two people familiar with the talks said Nissan was seeking a long-term, stable shareholder such as a bank or insurance group to replace some of Renault’s stake as Nissan finalizes the terms of its new electric car partnership with arch-rival Honda.

“We have 12 or 14 months to survive,” said a senior official close to Nissan.

Nissan has not ruled out Honda buying some of its shares, with “all options” being considered as it launches a series of restructuring measures amid declining sales in both China and the United States, the people said.

In addition, people close to Renault said it would be open to selling part of its stake in Nissan to Honda as part of a restructuring of its 25-year Nissan alliance. A person close to Renault said a stronger relationship between Nissan and Honda “could only be positive” for the French group.

Nissan and Honda have stepped up partnership talks to develop electric cars and software technology amid intense pressure from Chinese rivals and greater uncertainty in the United States following Donald Trump’s re-election as president.

“This is going to be tough. And ultimately we need Japan and the U.S. to generate money,” said the senior official close to Nissan. Having failed to capture the recent boom in popularity of hybrid sales in the U.S., Nissan is planning a a number of important product launches in the coming months and years.

Since announcing their partnership in August, both Japanese companies had played down the possibility of a capital tie-up, with a person close to Nissan saying Honda buying a stake remained “a last resort”.

But the search for an anchor investor has become even more critical as the turmoil at Nissan is attracting investment from Singapore-based Effissimo Capital Management and Hong Kong’s Oasis Management, two of the most high-profile activists in Asia, whose campaigns have previously targeted e.g. Toshiba and Nintendo.

Nissan’s closer ties with Honda came after it restructured its long-standing alliance with Renault, which was agreed after the French carmaker rescued the Japanese group from near-bankruptcy in 1999.

However, the relationship was plagued by constant conflicts over its unequal shareholding and voting rights, with Renault owning 43 percent of Nissan, while Nissan only owned 15 percent of the French group with no voting rights.

Following their recapitalization last year, the French carmaker reduced its Nissan holdings to just under 36 percent, including the remaining 18.7 percent in a French trust that it has reduced. Nissan was given voting rights for its 15 percent stake in Renault, which will retain a 15 percent voting stake in the Japanese group.

Nissan also has a 34 percent stake in smaller alliance partner Mitsubishi Motors, which it plans to cut to 24 percent as part of its relief measures.

Nissan declined to comment on the search for an anchor investor and the possibility of Honda buying a stake, but added: “The partnership with Honda is strategically very important and we hope to accelerate the realization of the results of our operations through regular progress at the management level in both companies.”

Honda declined to comment.

While Renault is not directly involved in the talks, it may be open to partnering with Nissan, Honda and Mitsubishi as automakers join forces to develop electric vehicles in response to China’s strength in the industry, people familiar with the matter said. Renault said in a statement that there were no discussions about a wider partnership, however. It added that it supported a “potential win-win between Nissan and Honda”.

The people familiar with the matter said the outcome of the talks would present a test case for how companies could survive industry upheaval, pitting the likes of Stellantis, born out of a mega-merger, against smaller players like Renault and Nissan , who threw technology and regional partnerships.

“Is bigger really better? Or is the partnership model better?” said the senior official close to Nissan, noting that pursuing scale would lead to inefficiencies after a certain point.

People familiar with the talks said a wider collaboration involving Renault and Mitsubishi made strategic sense, although the French group added that there were no discussions at present to that end.

While there is a wide overlap in geographic footprint for Nissan and Honda with their focus on China, the US and Japan, Renault would bring strength in Europe. Meanwhile, both Renault and Honda are attracted to Mitsubishi’s competitive advantage over Chinese rivals in Southeast Asia and its advanced plug-in hybrid technology.

Regarding the collaboration between the three Japanese automakers, Mitsubishi Motors said “we are currently exploring all options and are eager to collaborate in areas where we can leverage our strengths,” but added that no specific details had been finalized.