Nissan Delays Supplier Payments to Boost Cash Flow Amid Significant Financial Challenges

Japanese automaker Nissan is facing a severe financial crisis that has pushed it to take unconventional measures to maintain sufficient cash flow to support its operations and achieve temporary financial stability. Internal emails and company documents reviewed by Reuters reveal that Nissan has asked some of its suppliers in Europe and the UK to delay their payment deadlines as part of a short-term cash flow management strategy.

Background of the Financial Crisis

Nissan has been struggling for several years with declining sales and increasing challenges due to an aging vehicle lineup, resulting in a net loss of $4.5 billion for the fiscal year ending March 2025. Under these circumstances, the company has not issued financial forecasts for the current year, with internal expectations of continued financial difficulties.

Measures Taken to Enhance Liquidity

With the appointment of new CEO Ivan Espinosa in April 2025, Nissan launched an ambitious cost-cutting plan aiming to reduce expenses by 500 billion yen ($3.4 billion) over the next two years. The plan includes closing seven factories and reducing the global workforce by 15%.

As part of these efforts, Nissan requested its suppliers in Europe and the UK to agree to postpone invoice payments to the next fiscal quarter, between August and September 2025, instead of the original June due date. This step aims to free up approximately €150 million in short-term cash flow.

Supplier Options and Compensation

According to internal communications, suppliers were given two options: either adhere to the original payment schedule or agree to the delay in exchange for additional compensation. In cases where suppliers chose to delay, banks such as HSBC stepped in to pay suppliers upfront, with Nissan reimbursing the amounts plus interest later.

In an official statement to Reuters, Nissan confirmed that it offered flexible payment terms to some suppliers without imposing additional costs, aiming to support the company’s free cash flow.

Internal Details and Dimensions of the Crisis

Emails exchanged between Nissan’s purchasing and treasury teams in Europe and the UK indicate that this move was directed from top management, with one employee describing it as “a request from the CEO from top to bottom.” However, the company denied that the CEO imposed specific functional tasks in the regions.

This is not the first time Nissan has resorted to delaying payments as a temporary solution; the company used this method previously at the end of the last fiscal year in March 2025. Separate reports also suggest possible payment irregularities to suppliers within Japan, which may involve violations of local laws.

Ongoing Financial Challenges

Nissan faces significant financial hurdles, having been downgraded to “junk” status by major credit rating agencies, complicating efforts to secure new financing. Nevertheless, the company hopes that its cost-cutting and restructuring plan will generate positive cash flow by fiscal year 2026.

Impact on Operations and Employees

Nissan’s plan also includes reducing the workforce by approximately 20,000 employees, about 15% of its global staff, along with closing key factories. Among the affected plants is the Sunderland factory in the UK, the city’s largest employer with around 6,000 workers, where talks are expected to begin regarding voluntary retirement options.

Outlook

Through these measures, Nissan aims to rebuild its operational and financial structure to become more flexible and capable of facing future challenges. With fierce competition in the electric vehicle market and increasing reliance on advanced technology, the company needs strong financial stability to support its future investments.