Chang Sha Wan Bao·2025-06-11 06:41Core Viewpoint - The automotive industry in China is unifying supplier payment terms to a maximum of 60 days, driven by a new regulation aimed at stabilizing the supply chain and promoting high-quality development in the sector [1][2]. Group 1: Industry Actions - Major automotive companies, including Dongfeng Motor, GAC Group, FAW Group, Geely, and BYD, have committed to the 60-day payment term for suppliers, marking a rare consensus among competitors in a highly competitive market [1]. - This initiative aligns with the implementation of the "Regulations on Payment of Funds to Small and Medium-sized Enterprises," which aims to address payment delays and improve the business environment [1][2]. Group 2: Financial Implications - Historically, Chinese automotive companies have had payment terms averaging over 100 days, with some exceeding 200 days, which has negatively impacted upstream suppliers' profitability [2]. - The new payment terms may impose short-term financial pressure on automotive companies but are expected to foster a healthier financial ecosystem in the long run, enhancing the quality of vehicles produced [2]. Group 3: Broader Economic Impact - The automotive industry's move to healthier payment practices is anticipated to influence other sectors, particularly smaller suppliers, which are crucial to the economy [3]. - Establishing a healthy financial cycle within the automotive industry could lay a solid foundation for a qualitative leap in the broader Chinese economy [3].