Group 1 - The chairman of Great Wall Motors, Wei Jianjun, criticized the exaggerated marketing tactics of car companies, stating that such behavior is not sustainable and often misleading [1] - Wei emphasized the importance of establishing a correct value system within the company to ensure steady and solid growth, indicating that executives would face consequences for over-exaggeration during public announcements [1] - A recent joint notice from six departments aims to combat false advertising in the automotive sector, focusing on misleading claims regarding vehicle and battery performance [1] Group 2 - Great Wall Motors, along with 17 other car manufacturers, has committed to the "Payment Norms for Automotive Whole Vehicle Enterprises" initiative, ensuring timely payments to suppliers [2] - The company plans to use bank transfers and bank acceptance bills exclusively for payments, eliminating electronic voucher payments, and aims to further optimize payment processes [2] - In the latest semi-annual report, Great Wall Motors reported a revenue of 92.335 billion yuan, a year-on-year increase of 0.99%, while net profit decreased by 10.21% to 6.337 billion yuan [2]

Core Viewpoint - The automotive industry is taking steps to address "involution" competition by implementing a "60-day payment term" for suppliers, with several companies successfully executing this commitment, showcasing their methods and results [1][3][9]. Group 1: Commitment Implementation - Multiple automotive companies, starting from June 10, have committed to reducing supplier payment terms to within 60 days, with the Ministry of Industry and Information Technology (MIIT) facilitating this process [3][6]. - By August 11, companies like FAW Group, GAC Group, and Seres Group reported their experiences and successes in fulfilling this commitment [1][3]. - FAW Group has established a cross-departmental task force to ensure seamless management of payment processes, including contract revisions to specify payment terms [3][4]. 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][8]. - GAC Group has developed a comprehensive control system that digitizes the entire payment process, allowing real-time tracking of order and payment statuses [5][8]. - Seres Group employs a "factory within a factory" model to streamline processes and reduce costs, enhancing payment efficiency [5][8]. Group 3: Industry Response and Trends - Other automotive companies, including Dongfeng, Changan, and Geely, are also actively working to implement the 60-day payment term [6][9]. - The automotive industry has seen a decline in profit margins, dropping from 7.8% in 2017 to 4.3% in 2024, with the first four months of this year showing a further decrease to 4.1% despite increased production and sales [9][11]. - The MIIT and industry associations are monitoring the situation, with a focus on stabilizing the market and reducing price wars that have negatively impacted profitability [10][11]. Group 4: Payment Methods and Supplier Support - The shift in payment methods is crucial, with companies like FAW Group moving to 100% cash payments for recognized small and medium-sized suppliers to alleviate financial pressure [8]. - GAC Group has also prioritized cash payments, achieving a 95% cash transfer rate, which significantly benefits suppliers [8]. - The implementation of the revised "Regulations on Payment for Small and Medium Enterprises" aims to prevent the forced acceptance of non-cash payment methods, ensuring timely payments [7][8].

Core Viewpoint - The commitment of car manufacturers to a maximum payment term of 60 days for suppliers is a response to the revised "Regulations on Payment for Small and Medium Enterprises" effective June 1, 2025, but suppliers express skepticism about the effectiveness of this change due to existing operational hurdles and potential price reductions tied to these commitments [4][6][32]. Group 1: Commitment to Payment Terms - Multiple car manufacturers, including major players like GAC, BYD, and NIO, have publicly committed to a maximum payment term of 60 days for suppliers [2]. - In addition to the 60-day payment term, some manufacturers like SAIC and BAIC have pledged not to use commercial acceptance bills, which can increase financial pressure on suppliers [3][38]. - The new regulations stipulate that large enterprises must pay small and medium enterprises within 60 days of delivery, with no conditions tied to third-party payments [6]. Group 2: Supplier Concerns - Despite the commitment to better payment terms, suppliers are frustrated with the numerous hurdles they face in receiving payments, including complex approval processes and lengthy verification stages [7][20]. - Suppliers report that the bidding process has become increasingly competitive and challenging, with frequent re-bidding and price pressures that erode profit margins [16][19]. - The verification process for payments is often cumbersome, with suppliers facing difficulties in confirming project completion and receiving timely payments [25][30]. Group 3: Payment Mechanisms - Suppliers express strong dissatisfaction with the use of commercial acceptance bills, preferring bank acceptance bills due to their better liquidity and lower costs [34][35]. - The reliance on acceptance bills can create additional financial burdens for suppliers, as they may face challenges in discounting these bills [36]. - The commitment from manufacturers to avoid commercial acceptance bills is seen as a more genuine effort to support suppliers compared to merely extending payment terms [38]. Group 4: Industry Dynamics - The financial dynamics of car manufacturers often involve significant liabilities to suppliers, which contrasts with foreign manufacturers that tend to owe more to banks and financial institutions [41]. - The rapid development of the automotive industry in China has led to a focus on cost-cutting at the expense of supplier relationships, highlighting a need for manufacturers to adopt a more collaborative approach [42][43]. - The overall sentiment in the industry suggests a desire for a more equitable and transparent competitive environment, as the current practices lead to mutual dissatisfaction among both manufacturers and suppliers [46].