France To Review Nissan's European Supplier Payment Practices

According to foreign media reports, related documents show that the French government is reviewing whether Nissan's European subsidiary is making timely payments to suppliers and has requested the automaker to submit a large amount of financial records for 2024.

The French Ministry of Economy's competition affairs department notified Nissan of the review last month, stating that this move is part of a broader effort to ensure the company makes timely payments to suppliers.

A letter from the French Competition Authority to Nissan Europe on August 19 shows that, as part of the review process, the authority plans to conduct an on-site inspection at Nissan's regional headquarters in Montigny-le-Bretonneux, near Paris, on October 7.

Image source: Nissan Motor Corporation

Currently, Nissan has not been accused of any wrongdoing. According to the letter's requirements, Nissan Europe must submit financial accounts, payment records, and other related documents for the period from January 1 to December 31, 2024, before the on-site inspection at the regional headquarters.

The French Ministry of Economy's Directorate General for Competition has informed Nissan in a letter that the company may face administrative penalties, including fines, if violations are found. According to French law, businesses must pay suppliers within 60 days of issuing an invoice, or they may face fines of up to 2 million euros (approximately 2.36 million dollars).

However, the aforementioned letter did not mention the names of the affected suppliers or the number of suppliers involved.

In June of this year, Reuters reported that Nissan Motor Co. offered some suppliers in the EU and the UK an option to receive higher payment amounts if they agreed to accept delayed payments, a move that helps the troubled automaker free up short-term cash.

It is not uncommon for companies to request suppliers to extend payment terms to manage cash flow, and it is currently unclear what prompted the French regulators to review Nissan's actions.

Nissan's European division stated in a statement that it has received inquiries from relevant French authorities regarding the payment situation from its European headquarters to suppliers, but did not provide further details.

The statement also said, "The inquiry request did not indicate any wrongdoing by Nissan, and we are fully cooperating with the relevant authorities and are prepared to provide necessary information and explanations." However, the Nissan statement did not mention the name of the department that issued the inquiry request.

A spokesperson for the French Ministry of Economy's Department of Market Competition declined to comment on the above report.

According to a fact sheet from the European Commission, late payments put pressure on small and medium-sized enterprises, increasing the risk of unemployment and even company bankruptcies. The fact sheet states that about a quarter of company bankruptcies in the EU are related to delayed payments.

EU member states are required to ensure that payments made by businesses within their jurisdiction comply with EU regulations, and payments should be completed within 60 days, unless the parties to the contract explicitly agree on a different timeframe that is fair.

A survey conducted by trade credit insurance company Atradius in May found that approximately 47% of business-to-business invoices in Western Europe were overdue. In France, this proportion was even higher, reaching 52%.

France has recently intensified its investigation into delayed payments by businesses, with the country's market competition authority examining 409 companies in the first half of 2025. It found that nearly 40% of these companies were in violation. The resulting fines amounted to approximately 47 million euros.

In contrast, in the first five months of 2024, the aforementioned regulatory agencies conducted 248 inspections, finding that approximately 28% of companies had violations, resulting in nearly 30 million euros in fines.

It is worth noting that the challenge of delayed payments by enterprises is not unique to Europe, but rather a globally prevalent issue. As the largest automotive market in the world, China also attaches great importance to and actively addresses this problem.

In June this year, Chinese government departments issued the "Regulations on Ensuring Payments to Small and Medium-sized Enterprises" with the aim of promoting timely payments by government agencies, public institutions, and large enterprises to SMEs, safeguarding the legitimate rights and interests of SMEs, and optimizing the business environment. Following the issuance of these regulations, several Chinese car companies, including GAC, FAW, Dongfeng, and BYD, actively responded and committed to shortening the payment period for suppliers to within 60 days.

The scrutiny from French regulators has become the latest challenge for Nissan Motor Company. Last year, Japanese regulators discovered that Nissan had delayed payments totaling 3 billion yen (approximately 20 million USD) to dozens of suppliers over the past two years. However, the company settled the outstanding payments before the investigation was announced, and Japanese regulators also recommended that it strengthen oversight of payments to suppliers.

The review comes as Nissan implements a comprehensive turnaround plan globally, aimed at cutting costs by $3.4 billion, including reducing about 15% of its global workforce and closing or consolidating seven factories to get the company back on a growth track. Nissan reported an operating loss of $535 million in the first fiscal quarter from April to June, marking its first quarterly operating loss in four years.

Due to weak sales in the Chinese and American markets, coupled with the impact of its early expansion strategy, Nissan aims to achieve positive free cash flow by the fiscal year 2026.