Core Viewpoint - The article discusses the ongoing challenges faced by suppliers in the Chinese automotive industry, particularly regarding delayed payments from car manufacturers despite recent commitments to shorten payment terms to 60 days. Group 1: Payment Delays and Supplier Struggles - Many suppliers are still not receiving payments on time, with some relying on personal relationships with purchasing staff to expedite payments rather than legal or governmental channels [8][9][10]. - The new regulations mandating payment within 60 days for large enterprises purchasing from small and medium-sized enterprises (SMEs) have not been effectively implemented, leading to continued issues with delayed payments [6][7][14]. - Suppliers report that while some car manufacturers have improved payment speeds, others, particularly in the new energy vehicle sector, continue to delay payments despite previous commitments [12][16]. Group 2: Payment Practices and Industry Dynamics - The practice of using acceptance bills (承兑汇票) remains prevalent, allowing manufacturers to extend payment periods beyond the agreed terms, particularly affecting secondary suppliers [15][20]. - The competitive nature of the automotive industry leads to a culture where suppliers feel pressured to maintain business relationships, often at the expense of timely payments [28][29]. - Some suppliers, especially those with monopolistic positions in niche markets or those supplying foreign joint ventures, experience fewer payment issues compared to others [25][27]. Group 3: Regulatory and Market Responses - The article highlights the gap between policy and practice, noting that while regulations exist to protect suppliers, enforcement and adherence are lacking [24][33]. - The Ministry of Industry and Information Technology has opened a platform for reporting issues related to payment delays, but suppliers are hesitant to utilize it due to fear of damaging business relationships [29][30]. - The overall sentiment among suppliers is one of resignation, prioritizing business continuity over legal recourse for payment disputes [29][32].

Core Viewpoint - The recent commitment by 17 major Chinese automakers to shorten supplier payment cycles to 60 days has not alleviated concerns within the supply chain, as many manufacturers express skepticism about the enforceability of this change and the potential for companies to circumvent the new regulations [1][3][4] Group 1: Payment Cycle Changes - 17 major automakers, including BYD and Geely, announced a reduction in supplier payment cycles to within 60 days after discussions with regulatory authorities [1] - Despite this commitment, many suppliers remain worried about the long-standing issue of extended payment cycles, with some manufacturers indicating that they may use alternative financial instruments like acceptance bills to delay cash payments [1][3] - Only SAIC Motor and BAIC Group explicitly stated they would not use acceptance bills, while other companies did not clarify their payment methods [1] Group 2: Impact on Suppliers - The Ministry of Industry and Information Technology highlighted that excessively long payment terms have exacerbated cash flow crises for suppliers, particularly affecting small and medium-sized enterprises [3] - A high-ranking executive from a company supplying automotive lighting components noted that payment cycles from clients often exceed six months, making survival increasingly difficult for smaller suppliers [3] Group 3: Market Dynamics and Risks - The automotive industry is experiencing a significant shift, with the number of brands exiting the electric vehicle market exceeding those entering for the first time in 2024, indicating a potential market contraction [4] - The ongoing price war in the electric vehicle sector is creating systemic risks, as leading companies extend payment terms to alleviate financial pressure, which in turn impacts supplier profitability [4] - The Ministry's new regulations and the automakers' commitment to a 60-day payment cycle face three main challenges: limited benefits for multi-tier suppliers, potential circumvention of regulations through alternative financing methods, and increased financial strain on automakers due to the competitive landscape [4] Group 4: Recommendations and Industry Transition - Suggestions to address the supply chain crisis include implementing differentiated payment terms based on supplier size and developing financial tools like supply chain asset-backed securities and credit insurance to mitigate bad debt risks for small enterprises [5] - The data indicating a 12% year-on-year increase in the average export price of Chinese new energy vehicles from January to May 2025 suggests a shift towards higher-end products, reflecting the industry's transition from rapid growth to a more mature market [5]