Hello from Tokyo. Japanese auto parts maker Marelli Holdings, one of the world’s largest automotive suppliers, announced Wednesday that it has filed for Chapter 11 bankruptcy protection through a U.S. court. In May, the company proposed restructuring through a sale to Indian auto parts giant Motherson Group. The plan collapsed, however, due to a lack of agreement among Marelli’s creditors. The company will now seek a new sponsor under court supervision.
Marelli was formed in 2019 when Calsonic Kansei — a Japanese auto parts manufacturer owned by U.S. investment firm KKR — acquired and merged with leading Italian parts supplier Magneti Marelli. Calsonic Kansei was once a prestigious supplier affiliated with Nissan Motor, while Magneti Marelli once operated under Fiat Chrysler Automobiles (now Stellantis). Both companies were actively involved in various motorsports, so some readers may still remember the logos of Calsonic Kansei and Magneti Marelli.
This is the second time Marelli has faced major debt restructuring. The company aimed to diversify its customer base through expansion after the merger, but its operations stalled when key client Nissan faced a management crisis and Stellantis’ performance declined.
The automotive industry is structured like a vast pyramid, with major car brands at the top and layers of parts suppliers below. Marelli’s latest bankruptcy was driven primarily by the poor performance of Nissan, which stands at the top of its pyramid. If Marelli fails to recover, the effects could ripple through Nissan’s production and threaten to bring down the entire industrial pyramid. Indeed, the outcome of Marelli’s restructuring may have major implications for the global automotive industry. Please visit Nikkei Asia for the latest updates.
My suggested reads
1. “Jumbo,” a locally made animated movie, has shaken up Indonesia’s film and cinema industries, becoming the No. 2 most-viewed film in the country’s theaters of all time. Its success underscores the growing dominance of domestically produced movies in Southeast Asia’s largest economy, ending Hollywood’s reign of blockbuster supremacy.
2. It has been 10 years since Japan adopted the Corporate Governance Code, aimed at strengthening shareholder rights, enhancing disclosure and more. While progress has been gradual, listed companies have improved their capital allocation and transparency. The efforts are finally bearing fruit, with foreign investors starting to bet on corporate Japan.
3. Donald Trump has been calling on Apple to make its iPhones in the U.S. The president might not get what he wants on that front anytime soon, but AI server makers supplying Nvidia, Microsoft, Google and others have been heeding his call to onshore tech manufacturing far more quickly.
4. Come December, major social networks are supposed to block out Australians under 16 under a new law adopted last year. Although Canberra is still working on mechanisms to implement the age limit, other governments in the region and beyond are already looking at following in Australia’s footsteps.
5. Nikkei joined Issey Miyake designer Makiko Minagawa on a visit to India, where for decades she has collaborated with artisans to bring the country’s rich textile traditions to the global high-fashion stage. Take a tour of the craft and mastery behind their creations in this richly illustrated story.
Through the lens
This week’s top photo pick: People stand around the debris of an Air India Boeing 787-8 Dreamliner that crashed in India’s northwestern city of Ahmedabad, in Gujarat state, on June 12.
The plane, carrying 242 passengers and crew, crashed into a nearby medical college hostel moments after takeoff. The lone survivor, a British national of Indian origin, is being treated in a hospital, Air India said in post on X. In a separate post, the carrier said, “We regret to inform that, of the 242 aboard, there are 241 confirmed fatalities.” The Federation of All India Medical Association said that about 50 to 60 students were admitted to a hospital while up to five others were missing. (Photo by Ajit Solanki/AP)
Check out more of our photo coverage here
Wishing you a wonderful weekend!
Akito Tanaka
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