Nissan Motor Co., Ltd. NSANY is facing a cash shortage, delaying payments to suppliers and implementing major global cost-cutting measures. In May, the company unveiled a recovery strategy that includes eliminating 20,000 jobs or about 15% of its global workforce, and shutting down several factories to conserve cash and cut expenses.
As part of these efforts, Nissan will begin discussions this week with workers at its Sunderland plant in the U.K. about voluntary retirement, aiming to reduce the workforce there by approximately 250 employees. The Sunderland facility, which employs around 6,000 people, is the city’s largest employer and plays a key role in Nissan’s turnaround. The Japanese automaker is set to produce the company’s next generation of electric vehicles in the facility, including the updated LEAF, Juke and Qashqai models.
Per Reuters, Nissan is negotiating with suppliers for more time to settle invoices. The company has offered flexible payment options to selected suppliers in the U.K. and Europe at no additional cost. These arrangements aim to free up cash for the April-June quarter, echoing similar strategies used at the end of the last fiscal year.
Per an employee email, Nissan had once again asked suppliers to postpone payments. As the company implements these measures, its goal is to maintain enough liquidity to cover the costs of the turnaround and meet upcoming bond repayments.
Though it declined to comment on the internal conversations, the emails revealed that suppliers were offered two options. The supplier could either defer payments at a higher interest rate or receive immediate payment from HSBC, with Nissan later reimbursing the bank with interest.
As of March end, Nissan had 2.2 trillion yen in cash and equivalents but also faced roughly 700 billion yen in debt maturing later in the year. Under its Re:Nissan recovery plan, the company is targeting 250 billion yen in cost reductions and aims to return to profitability by fiscal year 2026.
NSANY’s Zacks Rank & Key Picks
Nissan carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the auto space are Strattec Security Corporation STRT, Allison Transmission Holdings, Inc. ALSN and Ferrari N.V. RACE, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for STRT’s fiscal 2025 sales and earnings implies year-over-year growth of 3.49% and 8.11%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 73 cents and 91 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for ALSN’s 2025 earnings implies year-over-year growth of 6.26%. EPS estimates for 2025 and 2026 have improved 54 cents and 53 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for RACE’s 2025 sales and earnings implies year-over-year growth of 13.56% and 7.97%, respectively. EPS estimates for 2025 and 2026 have improved 29 cents and 33 cents, respectively, in the past seven days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Nissan Motor Co. (NSANY): Free Stock Analysis Report Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report Strattec Security Corporation (STRT): Free Stock Analysis Report Ferrari N.V. (RACE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
