Coronavirus: Nissan suppliers feel pain from payment delay
The Japanese carmaker has told British suppliers that crucial payments are being delayed because of COVID-19, Sky News learns.
Monday 30 March 2020 19:05, UK
The Japanese car giant Nissan has left British suppliers in the lurch by delaying crucial payments, exacerbating the cashflow strain being felt in the UK's battered automotive sector.
Sky News has learnt that Nissan, which operates the country's biggest car manufacturing plant, at Sunderland, notified suppliers in recent days that payments they were due to receive would not arrive on time.
Industry sources said the delays were inflicting more pain on companies in the automotive sector at a time when they are being hammered by the effective shutdown of Britain's car manufacturing industry.
Many employers in the sector are now looking to furlough workers in an effort to access funding under the Coronavirus Job Retention Scheme.
The bosses of car makers operating in Britain, including Jaguar Land Rover, Aston Martin and Honda, held talks last week with Nadhim Zahawi, the business minister.
In an email passed to Sky News, the company told suppliers: "We would like to inform you that given the current situation related to coronavirus (COVID-19) and the drastic restrictions applied by governments as well as other key business partners in order to prevent and contain the spread of the coronavirus, our activities are affected, and this is despite all the significant steps taken by Nissan in order to mitigate the impact of this situation.
"We are currently re-organising our operations in order to face the current context and mitigate the impact of the restrictions applied across Europe on our operations.
"This is significantly disrupting our ability to function normally, and causing interruptions in our commercial flows and banking procedures as our counterparts are either working remotely or are not available at the moment.
"These impediments are affecting our ability to make the next payment of your invoices at the due time."
Nissan apologised for the problem, and said it would "proceed to payment within the shortest time possible".
The UK's car industry, which during the last three years has repeatedly warned about the adverse consequences of a no-deal Brexit, is braced for the coronavirus pandemic to wipe out months of normal sales activity.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said recently that "the outlook is of deep concern".
A Nissan spokesman said on Monday: "Payments to a number of our suppliers were delayed due to the disruption caused to our normal financial operations and procedures, both internally and with our external partners.
"More than 95% of the suppliers will be paid by the end of tomorrow [Tuesday], with the remainder paid as soon as possible.
"We apologise for any disruption this may have caused and are appreciative of our suppliers' continued support and patience."