Nissan has asked some of its suppliers in the U.K. and European Union to accept delayed payments in an effort to shore up cash flow during what it expects to be its most financially challenging quarter. The move comes as the Japanese automaker faces a projected negative free cash flow of ¥550 billion ($3.8 billion) and works to stabilize after a $4.5 billion annual loss.
Internal emails and documents reviewed by Reuters show that Nissan aims to push June payments to August or later, with some requests being sent out as early as this month. The initiative aligns with broader turnaround efforts under new CEO Ivan Espinosa, who took the helm in April and has pledged to cut costs by $3.4 billion over two years through 15% workforce reductions and seven plant closures.
In a statement to Reuters, Nissan confirmed that it had offered “more flexible payment terms” to some suppliers, with options to receive payment either immediately or at a later date, along with added interest. The automaker emphasized that participation was voluntary and aimed at preserving short-term liquidity while implementing restructuring efforts and redeeming upcoming bond maturities.
A company document from late 2024 estimated that delaying payments to more than a dozen vendors, including ManpowerGroup and Mitsui O.S.K. Lines, could free up roughly €59 million ($63 million). Internal correspondence also referenced a “purchasing task” target of €150 million in cost deferrals.
While supplier payment deferrals are not uncommon in capital-intensive industries, analysts say the move underscores the severity of Nissan’s current financial position. Its credit rating is now below investment grade with all three major agencies, and the automaker has ¥700 billion ($4.8 billion) in debt due this year.
Despite having ¥2.2 trillion ($15.1 billion) in cash at the end of March, Nissan expects recovery to take time. CFO Jeremie Papin previously warned that the first fiscal quarter would be the toughest and that the company is targeting a return to positive free cash flow by fiscal 2026.
