According to media reports, internal emails and a company document reveal that troubled Japanese automaker Nissan has requested some suppliers to allow delayed payments in a bid to ease short-term financial strain. The move highlights the automaker's urgent efforts to improve cash flow.
Correspondence and sources familiar with the matter indicate that Nissan has recently asked certain suppliers in the UK and EU to extend payment terms. Emails show the request aims to bolster the company's cash reserves by the end of the first fiscal quarter (April to June). Notably, Nissan made a similar request to suppliers before the end of the previous fiscal year in March.
It is not uncommon for companies to request extended payment terms from suppliers. In a statement to Reuters, Nissan explained that the recent approach was part of an incentive-based arrangement with select suppliers to establish more flexible payment terms, designed to optimize cash flow without imposing extra costs on the suppliers.
Nissan stated: "Suppliers have the option to receive immediate payment or opt for deferred payment with interest compensation."
Emails show that Nissan offered suppliers two choices: accept deferred payment in exchange for a higher amount or receive timely payment, in which case HSBC would pay upfront, and Nissan would later repay the bank with principal and interest. HSBC was listed as a partner bank in a Nissan filing submitted in March, though the bank declined to comment on client matters.
The correspondence sheds light on Nissan's short-term liquidity strategy, though it may result in higher future payouts. According to LinkedIn profiles, the email exchanges were primarily between Nissan UK and EU employees, involving staff in procurement and finance departments.
In one internal email this month, an employee informed colleagues that suppliers had "again" been asked to extend payment terms in line with "the CEO's top-down directive" to enhance free cash flow. However, Nissan denied that its CEO had issued specific instructions to regional functions.
The employee also noted that June payments would be postponed to August 15, with some deferred further to September. The request was reportedly made earlier this month, but suppliers were not being forced to comply.
Seiji Sugiura, Senior Analyst at Tokai Tokyo Intelligence Lab, commented, "This shows Nissan is facing financing challenges. They appear to be trying to delay spending as much as possible."
In its statement, Nissan said it is taking urgent steps to improve performance and reshape the company into a leaner, more resilient structure. While doing so, it aims to maintain ample liquidity to cover transformation costs and repay maturing debt.
Nissan forecasts a negative free cash flow of ¥550 billion (approximately $3.8 billion) for its automotive business in the current quarter, a deterioration from the ¥303 billion negative free cash flow recorded in the same period last year.
Nissan's Chief Financial Officer Jeremie Papin said in May that the first fiscal quarter is typically the most challenging, but the company aims to achieve positive free cash flow by fiscal year 2026.
It remains unclear whether Nissan made similar requests to suppliers in other regions, how many suppliers were contacted, or the duration of the proposed delays. Importantly, Nissan is already under scrutiny in Japan for underpaying dozens of suppliers, as discovered by regulatory authorities.
A company document from October 2024 shows that extending payment terms with over a dozen companies in the UK and EU-such as ManpowerGroup's UK subsidiary and Mitsui O.S.K. Lines-could boost free cash flow by as much as €59 million.
As of the end of March 2025, Nissan held ¥2.2 trillion (about $15.1 billion) in cash and equivalents, while facing around ¥700 billion in debt maturing this fiscal year. All three major credit rating agencies have downgraded Nissan's debt to junk status. The automaker noted in a recent filing that any further downgrade could complicate its future financing plans.
