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New Straits Times
10 hours ago
- Automotive
- New Straits Times
Nissan seeks to delay supplier payments to free up cash, company emails show
TOKYO: Nissan Motor has asked some suppliers to allow it to delay payments to free up short-term funds, according to several emails and a company document reviewed by Reuters, as the troubled Japanese automaker scrambles to boost cash. New CEO Ivan Espinosa, who took over in April, has unveiled plans to shed around 15 per cent of Nissan's global workforce and close seven plants as he targets 500 billion yen (US$3.4 billion) in cost cuts over the next two years. Battered by slumping sales and weighed down by an ageing vehicle lineup, the car maker reported a US$4.5 billion net annual loss in the financial year that ended in March and has declined to give a forecast this year. Now, Nissan has asked some suppliers in Britain and the European Union to accept delays in payment, according to the correspondence reviewed by Reuters and a person with knowledge of the matter. The move would allow it to have more cash on hand at the close of the April-June first quarter and follows similar requests before the end of the last financial year in March, the emails showed. It is not uncommon for companies to request payment extensions from suppliers to help free up cash. In a statement to Reuters, Nissan said it had incentivised some of its suppliers to collaborate under more flexible payment terms, at no cost to them, to support its free cash flow. "They could choose to be paid immediately or opt for a later payment with interest," Nissan said. The correspondence, which has not been previously reported, gives a detailed look at Nissan's effort to conserve cash in the short term, even if that means paying suppliers more down the line. The emails were exchanged among Nissan employees in Britain and the EU, including staff in its purchasing and treasury departments, according to their profiles on LinkedIn. One employee told co-workers in emails this month that suppliers were "again" being asked for an extension of payment terms. It was in line with the aim to bolster free cash flow "requested from CEO top down", the employee told colleagues. Nissan told Reuters its CEO did not mandate functional tasks in regions. June payments would be delayed to August 15, the employee wrote, later adding some would be pushed to September. Suppliers would not be forced to accept delayed payment, the employee wrote. The requests went out earlier this month, according to the person with knowledge of the matter. "It shows the difficult situation Nissan is facing in terms of financing," said Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory. "It appears they want to postpone their current expenses as much as possible." Nissan said in its statement that it was taking immediate actions to recover its performance and rebuild to a leaner, more resilient structure. "While we are taking these actions we aim for sufficient liquidity to weather the costs of the turnaround actions and redeem bond maturities," it said. It expects to record negative free cash flow of 550 billion yen, or about US$3.8 billion, for its automotive business this quarter, worse than the 303 billion yen in the same period last year. Following typical seasonal patterns, the first quarter is expected to be Nissan's most challenging, Chief Financial Officer Jeremie Papin said in May. It is targeting positive free cash flow by its 2026 financial year. Reuters was not able to determine whether Nissan made similar requests to suppliers in other regions, how many suppliers it contacted, or the term of extensions sought. In Japan, it has already faced scrutiny over supplier payments, after regulators found it had unlawfully underpaid dozens of them. BIG TASK In other internal emails, a director in the treasury department appeared to refer to a target of freeing up 150 million euros (US$175 million), stating in an email last month the need to deliver on a "purchasing task of 150M EUR." Delaying supplier payments until July - the start of Nissan's second quarter - was an option to help achieve the "purchasing task" of 150 million euros, the director wrote in another email. Nissan said in its statement it would not comment on internal discussions or specific targets. The emails showed Nissan discussed giving suppliers two options: one was to accept delayed payment in consideration for a higher payment. The other was to be paid on time as usual, in which case HSBC would make the payment and Nissan would later repay the bank with interest. HSBC, listed as one of Nissan's banks in a March filing, declined to comment on client matters. The automaker estimated it could boost free cash flow by up to 59 million euros by extending payment terms with more than a dozen companies in Britain and the EU, including UK-based units of temp-staffing firm ManpowerGroup and shipper Mitsui O.S.K. Lines, a company document from October 2024 showed. Both ManpowerGroup and Mitsui O.S.K. declined to comment. In February, the treasury department director wrote about delivering free cash flow for the close of the financial year in March, raising concern about meeting targets and saying more suppliers, including in India, needed to be contacted. "Only a few weeks remaining," the director wrote. "Urgent support needed." Nissan had 2.2 trillion yen (US$15.1 billion) in cash and cash equivalents on hand at the end of March. It faces some 700 billion yen in debt coming due this financial year. Its debt has been cut to "junk" by all three major ratings agencies. Any further ratings downgrades could complicate future fundraising plans, Nissan said in a filing this month.
Time of India
11 hours ago
- Automotive
- Time of India
Nissan seeks to delay supplier payments to free up cash, company emails show
Nissan Motor has asked some suppliers to allow it to delay payments to free up short-term funds, according to several emails and a company document reviewed by Reuters, as the troubled Japanese automaker scrambles to boost cash. New CEO Ivan Espinosa, who took over in April, has unveiled plans to shed around 15% of Nissan's global workforce and close seven plants as he targets 500 billion yen ($3.4 billion) in cost cuts over the next two years. Battered by slumping sales and weighed down by an ageing vehicle lineup, the car maker reported a $4.5 billion net annual loss in the financial year that ended in March and has declined to give a forecast this year. Now, Nissan has asked some suppliers in Britain and the European Union to accept delays in payment, according to the correspondence reviewed by Reuters and a person with knowledge of the matter. The move would allow it to have more cash on hand at the close of the April-June first quarter and follows similar requests before the end of the last financial year in March, the emails showed. It is not uncommon for companies to request payment extensions from suppliers to help free up cash. In a statement to Reuters, Nissan said it had incentivised some of its suppliers to collaborate under more flexible payment terms, at no cost to them, to support its free cash flow. "They could choose to be paid immediately or opt for a later payment with interest," Nissan said. The correspondence, which has not been previously reported, gives a detailed look at Nissan's effort to conserve cash in the short term, even if that means paying suppliers more down the line. The emails were exchanged among Nissan employees in Britain and the EU, including staff in its purchasing and treasury departments, according to their profiles on LinkedIn. One employee told co-workers in emails this month that suppliers were "again" being asked for an extension of payment terms. It was in line with the aim to bolster free cash flow "requested from CEO top down", the employee told colleagues. Nissan told Reuters its CEO did not mandate functional tasks in regions. June payments would be delayed to August 15, the employee wrote, later adding some would be pushed to September. Suppliers would not be forced to accept delayed payment, the employee wrote. The requests went out earlier this month, according to the person with knowledge of the matter. "It shows the difficult situation Nissan is facing in terms of financing," said Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory. "It appears they want to postpone their current expenses as much as possible." Nissan said in its statement that it was taking immediate actions to recover its performance and rebuild to a leaner, more resilient structure. "While we are taking these actions we aim for sufficient liquidity to weather the costs of the turnaround actions and redeem bond maturities," it said. It expects to record negative free cash flow of 550 billion yen, or about $3.8 billion, for its automotive business this quarter, worse than the 303 billion yen in the same period last year. Following typical seasonal patterns, the first quarter is expected to be Nissan's most challenging, Chief Financial Officer Jeremie Papin said in May. It is targeting positive free cash flow by its 2026 financial year. Reuters was not able to determine whether Nissan made similar requests to suppliers in other regions, how many suppliers it contacted, or the term of extensions sought. In Japan, it has already faced scrutiny over supplier payments, after regulators found it had unlawfully underpaid dozens of them. BIG TASK In other internal emails, a director in the treasury department appeared to refer to a target of freeing up 150 million euros ($175 million), stating in an email last month the need to deliver on a "purchasing task of 150M EUR". Delaying supplier payments until July - the start of Nissan's second quarter - was an option to help achieve the "purchasing task" of 150 million euros, the director wrote in another email. Nissan said in its statement it would not comment on internal discussions or specific targets. The emails showed Nissan discussed giving suppliers two options: one was to accept delayed payment in consideration for a higher payment. The other was to be paid on time as usual, in which case HSBC would make the payment and Nissan would later repay the bank with interest. HSBC, listed as one of Nissan's banks in a March filing, declined to comment on client matters. The automaker estimated it could boost free cash flow by up to 59 million euros by extending payment terms with more than a dozen companies in Britain and the EU, including UK-based units of temp-staffing firm ManpowerGroup and shipper Mitsui O.S.K. Lines, a company document from October 2024 showed. Both ManpowerGroup and Mitsui O.S.K. declined to comment. In February, the treasury department director wrote about delivering free cash flow for the close of the financial year in March, raising concern about meeting targets and saying more suppliers, including in India, needed to be contacted. "Only a few weeks remaining," the director wrote. "Urgent support needed." Nissan had 2.2 trillion yen ($15.1 billion) in cash and cash equivalents on hand at the end of March. It faces some 700 billion yen in debt coming due this financial year. Its debt has been cut to "junk" by all three major ratings agencies. Any further ratings downgrades could complicate future fundraising plans, Nissan said in a filing this month.
Malay Mail
07-05-2025
- Automotive
- Malay Mail
Toyota's hybrid momentum faces a Trump tariff speed bump
TOKYO, May 8 — Robust demand for hybrids is expected to underpin steady profits at Toyota when the world's top automaker reports annual earnings today, although investors will be on high alert for any sign of a looming impact from US tariffs. Investors will be paying close attention to how Toyota will factor in the hit from US President Donald Trump's tariffs on its future profits, as the levies are expected to deal a heavy blow to car makers doing business in the US. Another attention point will be what Toyota will say about Toyota Industries 6201.T after the automaker confirmed last month that it was considering investing in a potential buyout of the key parts supplier. 'The focus is on the guidance for the fiscal year ending March 2026,' said Seiji Sugiura, a senior analyst at Tokai Tokyo Intelligence Laboratory. 'I don't know whether the Trump tariffs will be factored in or not.' For the fourth quarter, the Japanese automaker is expected to deliver a 2 per cent year-on-year rise in operating profit to ¥1.13 trillion (RM33.2 billion) according to the average of seven analysts surveyed by LSEG, a result that would mark the first increase in three quarters. Sales data have already indicated that momentum for the company has held up at the start of the year. Toyota's global sales rose 5 per cent in January-March versus a year earlier on solid demand in its top market, the United States, and Japan. Toyota's operating profit for fiscal 2024 is set to come in lower than the prior year's record one. In February, the automaker raised its operating profit forecast for the fiscal year just ended to ¥4.7 trillion, a result that would mark a 12 per cent year-on-year drop. Strong demand for its gasoline-electric hybrids such as the Prius and the Camry has vindicated Toyota's bet on the technology but also presents a challenge for the automaker, as suppliers have been struggling to keep pace. Potential tariff hit The company's fiscal 2025 operating profit could face a hit of ¥800 billion due to the impact of the tariffs on Toyota's US-bound exports from Japan, said Tokai Tokyo's Sugiura. The estimate does not factor in any broader impact from Trump's tariffs, such as from a potential US economic slowdown or on Toyota's exports to the world's biggest economy from Canada and Mexico, where it has production bases and makes some of its most popular models. Toyota has previously said it will continue to run its operations as normal and focus on bringing down fixed costs, stopping short of implementing more radical steps such as hiking car prices in response to the tariffs. People familiar with the matter have told Reuters that Toyota is considering producing the next version of its top-selling RAV4 SUV in the US in order to shield itself from potential risks from US tariffs and exchange rates and as demand for the car looked likely to outstrip supply. Toyota's shares have lost 13 per cent so far this year, compared with an 8 per cent decline for the Nikkei 225 index over that period. Analysts will also be watching for an update on Toyota's strategy on unwinding cross-shareholdings amid broad pressure from regulators and investors on Japanese companies to get rid of stakes in affiliates and business partners. How Toyota's market price will be impacted by its possible investment in a potential buyout of Toyota Industries, a nearly 100-year-old company from which Toyota Motor was spun off, would depend on the structure of any potential deal, said James Hong, head of mobility research at Macquarie. Toyota owned about 24 per cent of Toyota Industries as of September last year, while Toyota Industries held around 9 per cent of the world's biggest automaker and more than 5 per cent of Denso, another major Toyota supplier and Toyota group company. Extra investment in the supplier by Toyota would likely be taken as a negative by investors, while steps aimed at addressing cross-shareholding and dual-listing concerns might be seen as a positive for the whole market, including Toyota, he said. — Reuters
CNA
07-05-2025
- Automotive
- CNA
Toyota's earnings buffered by demand for its hybrids, but US tariff hit looms
TOKYO : Robust demand for hybrids is expected to underpin steady profits at Toyota when the world's top automaker reports annual earnings on Thursday, although investors will be on high alert for any sign of a looming impact from U.S. tariffs. Investors will be paying close attention to how Toyota will factor in the hit from U.S. President Donald Trump's tariffs on its future profits, as the levies are expected to deal a heavy blow to car makers doing business in the U.S. Another attention point will be what Toyota will say about Toyota Industries after the automaker confirmed last month that it was considering investing in a potential buyout of the key parts supplier. "The focus is on the guidance for the fiscal year ending March 2026," said Seiji Sugiura, a senior analyst at Tokai Tokyo Intelligence Laboratory. "I don't know whether the Trump tariffs will be factored in or not." For the fourth quarter, the Japanese automaker is expected to deliver a 2 per cent year-on-year rise in operating profit to 1.13 trillion yen ($7.86 billion) according to the average of seven analysts surveyed by LSEG, a result that would mark the first increase in three quarters. Sales data have already indicated that momentum for the company has held up at the start of the year. Toyota's global sales rose 5 per cent in January-March versus a year earlier on solid demand in its top market, the United States, and Japan. Toyota's operating profit for fiscal 2024 is set to come in lower than the prior year's record one. In February, the automaker raised its operating profit forecast for the fiscal year just ended to 4.7 trillion yen, a result that would mark a 12 per cent year-on-year drop. Strong demand for its gasoline-electric hybrids such as the Prius and the Camry has vindicated Toyota's bet on the technology but also presents a challenge for the automaker, as suppliers have been struggling to keep pace. POTENTIAL TARIFF HIT The company's fiscal 2025 operating profit could face a hit of 800 billion yen due to the impact of the tariffs on Toyota's U.S.-bound exports from Japan, said Tokai Tokyo's Sugiura. The estimate does not factor in any broader impact from Trump's tariffs, such as from a potential U.S. economic slowdown or on Toyota's exports to the world's biggest economy from Canada and Mexico, where it has production bases and makes some of its most popular models. Toyota has previously said it will continue to run its operations as normal and focus on bringing down fixed costs, stopping short of implementing more radical steps such as hiking car prices in response to the tariffs. People familiar with the matter have told Reuters that Toyota is considering producing the next version of its top-selling RAV4 SUV in the U.S. in order to shield itself from potential risks from U.S. tariffs and exchange rates and as demand for the car looked likely to outstrip supply. Toyota's shares have lost 13 per cent so far this year, compared with an 8 per cent decline for the Nikkei 225 index over that period. Analysts will also be watching for an update on Toyota's strategy on unwinding cross-shareholdings amid broad pressure from regulators and investors on Japanese companies to get rid of stakes in affiliates and business partners. How Toyota's market price will be impacted by its possible investment in a potential buyout of Toyota Industries, a nearly 100-year-old company from which Toyota Motor was spun off, would depend on the structure of any potential deal, said James Hong, head of mobility research at Macquarie. Toyota owned about 24 per cent of Toyota Industries as of September last year, while Toyota Industries held around 9 per cent of the world's biggest automaker and more than 5 per cent of Denso, another major Toyota supplier and Toyota group company. Extra investment in the supplier by Toyota would likely be taken as a negative by investors, while steps aimed at addressing cross-shareholding and dual-listing concerns might be seen as a positive for the whole market, including Toyota, he said. ($1 = 143.7500 yen)
