Bei Jing Shang Bao·2025-08-12 16:12Core Viewpoint - The automotive industry is undergoing a transformation to address "involution" competition, with companies committing to a "60-day payment term" for suppliers, aiming to enhance the industry's health and orderliness [1][9][10]. Group 1: Commitment Implementation - Several automotive companies, including China FAW, GAC Group, and Seres Group, have begun implementing the "60-day payment term" commitment, showcasing their specific practices and results [1][3]. - China FAW has established a cross-departmental task force to ensure seamless management and has revised contract templates to specify payment terms [3][4]. - GAC Group has developed a comprehensive control system covering the entire process from order issuance to payment, allowing real-time tracking of progress for both suppliers and the company [5][6]. Group 2: Payment Process and Challenges - The payment initiation time and review process are critical for suppliers, as delays in internal audits can extend the payment timeline [4][7]. - GAC Group emphasizes cash payments, with 95% of transactions being cash, significantly reducing the burden on suppliers [8]. - China FAW has introduced 100% cash payments for recognized small and medium-sized enterprise suppliers, moving away from a mixed payment model [8]. Group 3: Industry Trends and Financial Health - The automotive industry has seen a decline in profit margins, dropping from 7.8% in 2017 to 4.3% in 2024, with a further decrease to 4.1% noted this year [9][10]. - Despite increased production and sales, the industry faces challenges from price wars, which have been identified as a significant factor in declining profitability [10][11]. - Recent data indicates a recovery in profit margins, with the automotive industry generating revenues of 963.4 billion yuan in June, a 12% year-on-year increase, and a profit margin of 6.9% [11].