Core Viewpoint - The China Automobile Industry Association (CAAM) has released a "Payment Norms Initiative" aimed at standardizing payment practices between automobile manufacturers and suppliers, addressing issues such as order confirmation, delivery and acceptance, payment and settlement, and contract duration [1][8]. Group 1: Order Confirmation - The initiative emphasizes that both automobile manufacturers and suppliers must confirm order details such as order date, part specifications, quantity, and delivery cycle through procurement orders. Any changes or cancellations to effective orders must be mutually agreed upon [3]. Group 2: Delivery and Acceptance - The initiative specifies that manufacturers should complete the acceptance of goods within three working days of receipt. If discrepancies in quantity or quality are found, the supplier must rectify the issue within a specified timeframe, with liability and compensation handled according to the contract [3]. Group 3: Payment and Settlement - Payment terms are set to begin from the date of delivery and acceptance, with a maximum period of 60 calendar days. For continuous suppliers, payment can be consolidated after mutual agreement. If pricing is not agreed upon, manufacturers should make an initial payment based on a percentage of the last contract price [4][8]. - The initiative encourages long-term partnerships, with contracts having a minimum validity of one year [4]. Group 4: Industry Context and Impact - The automotive market is experiencing intensified competition, leading to pressure on suppliers through lower procurement prices and extended payment periods, which negatively impacts the health of the supply chain. In the first four months of this year, China's automobile production and sales exceeded 10 million units, but industry profit margins fell to 4.1% [4][5]. - The initiative aims to protect the rights of suppliers, especially small and medium-sized enterprises, and to foster a collaborative ecosystem between manufacturers and parts suppliers [5][6]. Group 5: Government Support and Industry Response - The Ministry of Industry and Information Technology supports the initiative, which clarifies requirements for delivery acceptance, payment timelines, and settlement processes. Several major manufacturers have publicly committed to adhering to the 60-day payment term [5][9]. - The initiative reflects a shift in the relationship between automotive manufacturers and suppliers, indicating a deeper adjustment phase within the industry [6].

Core Viewpoint - The China Automotive Industry Association (CAAM) has launched an initiative to standardize payment practices between automotive manufacturers and suppliers, aiming to foster a collaborative ecosystem and promote high-quality development in the automotive industry [1][2][8]. Group 1: Initiative Principles - The initiative emphasizes not exploiting the advantages of large enterprises to harm suppliers' interests, promoting a win-win collaboration between vehicle manufacturers and parts suppliers [2]. - In the order confirmation phase, both parties should agree on order details, and any changes to existing orders must be mutually negotiated [2]. - Payment terms stipulate that the maximum payment period should not exceed 60 calendar days from the date of delivery and acceptance [2]. Group 2: Contract Duration - The initiative encourages establishing long-term cooperative relationships, with each contract having a minimum validity period of one year [3]. Group 3: Industry Response - As of the report, 17 automotive manufacturers have committed to implementing the initiative, including Chery Group, which aims to standardize contract terms and comply with the "Regulations on Payment for Small and Medium Enterprises" [4]. - Companies like Seres and Changan Automobile have expressed their commitment to industry self-discipline and adherence to the 60-day payment term [4][5]. - Other major players such as Dongfeng, BYD, and Great Wall have also pledged to support the initiative and ensure supplier rights are protected [5]. Group 4: Policy Context - This initiative is part of a broader governmental effort to regulate the automotive industry, following the implementation of the revised "Regulations on Payment for Small and Medium Enterprises" which established a legal basis for the 60-day payment term [9]. - The CAAM's initiative details operational standards across four key areas: order confirmation, delivery acceptance, payment settlement, and contract duration [9]. Group 5: Industry Challenges - Despite the industry's growth, challenges persist, including rising debt levels among manufacturers due to increased R&D investments and structural adjustments for electric vehicle production [10]. - The average payment cycle for ten major domestic automakers was reported to be 182 days in the first half of the year, significantly exceeding the 60-day requirement [11].

Core Viewpoint - The article emphasizes the importance of establishing a fair and collaborative payment system between automotive manufacturers and suppliers to promote high-quality development in the automotive industry [3][9]. Group 1: Overall Principles - The initiative advocates for principles of equality, voluntariness, fairness, and integrity, ensuring compliance with national laws and regulations, and aims to protect the interests of suppliers, particularly small and medium-sized enterprises [3][10]. Group 2: Key Processes - **Order Confirmation**: Both parties must confirm the order details, including delivery dates, part specifications, and quantities, and any changes must be mutually agreed upon [4]. - **Delivery and Acceptance**: Suppliers must deliver goods as per the order and notify the manufacturer of delivery details. The manufacturer is required to complete acceptance within three working days [5]. - **Payment and Settlement**: Payment terms stipulate that the payment period should not exceed 60 calendar days from the acceptance of goods. For continuous supply, a consolidated accounting method can be used, with at least monthly reconciliations [6][11]. If pricing is not agreed upon, a preliminary payment based on previous contracts is encouraged [6][11]. Group 3: Contract Duration - The initiative encourages establishing long-term cooperative relationships, with contracts having a minimum validity of one year to stabilize supplier expectations [7][11]. Group 4: Additional Notes - The initiative serves as a general guideline for contract terms, allowing for further agreements based on actual circumstances. It aims to standardize payment processes and support the implementation of payment commitments by automotive manufacturers [12].