盐财经·2025-06-12 09:40Core Viewpoint - Multiple Chinese automotive companies have collectively committed to shortening payment terms to suppliers to within 60 days, marking a significant shift in the industry's approach to supplier relationships and financial practices [4][5][38]. Group 1: Industry Response - On June 10-11, 2025, several automotive companies, including China FAW, Dongfeng Motor, GAC Group, and others, announced a unified commitment to reduce payment terms to suppliers to 60 days or less [4][5]. - This collective action is notable in an industry characterized by fierce competition and individualistic strategies, contrasting sharply with previous practices where companies pressured suppliers for price reductions [4][5]. - The Ministry of Industry and Information Technology praised this initiative as a positive response to national calls for corporate responsibility and a step towards a collaborative ecosystem between manufacturers and suppliers [4][5]. Group 2: Legislative Context - The commitment aligns with the revised "Regulations on the Payment of Small and Medium-sized Enterprises," effective June 1, 2025, which mandates payment within 30 days for government purchases from SMEs, with a maximum of 60 days if otherwise agreed [8][10]. - This regulation indirectly addresses long-standing issues in the automotive sector, where extended payment periods have placed significant financial strain on suppliers [10][11]. Group 3: Current Payment Practices - Historically, payment cycles in the automotive industry have been excessively long, with companies like BYD and Geely averaging 127 days, and others like Changan reaching up to 205 days [11][12]. - In contrast, international companies like Tesla and Toyota maintain much shorter payment cycles, with Tesla averaging around 60.36 days and Toyota around 54.84 days [13][14]. Group 4: Supplier Challenges - Suppliers often face a power imbalance in negotiations, leading to extended payment terms and various payment methods that do not provide immediate cash flow [23][24]. - The reliance on commercial acceptance bills instead of cash payments exacerbates the financial burden on suppliers, as these bills can incur additional costs when discounted [19][20]. - The automotive supply chain has been under pressure, with suppliers required to finance their operations while waiting for payments, often leading to significant cash flow challenges [26][30]. Group 5: Future Implications - The new 60-day payment term could provide relief to suppliers who have historically endured long payment delays, but there are concerns about whether companies will adhere to this commitment [39][40]. - There is a risk that companies may shift more responsibilities onto suppliers to ensure their own financial stability, potentially increasing the burden on smaller suppliers [42][45]. - The industry is moving towards a more sustainable and cooperative relationship between manufacturers and suppliers, although challenges remain in balancing the needs of both parties [45].