Core Viewpoint - An increasing number of automotive companies have committed to a payment term of no more than 60 days for suppliers, responding to regulatory changes aimed at alleviating cash flow pressures in the supply chain [1][2]. Group 1: Industry Commitments - As of now, 15 automotive companies, including GAC Group, China FAW, Dongfeng Motor, NIO, Li Auto, Xiaomi Auto, Geely, BYD, Chery, Changan, Seres, BAIC, SAIC, Leap Motor, and Jianghuai Automobile, have pledged to keep payment terms within 60 days [1]. - SAIC and BAIC have not only committed to the 60-day payment term but also stated they will not use commercial acceptance bills, which can increase financial pressure on suppliers [1]. Group 2: Regulatory Context - The 60-day payment term aligns with the revised "Regulations on the Payment of Funds to Small and Medium-sized Enterprises" issued by the State Council, which took effect on June 1, requiring large enterprises to pay small and medium-sized enterprises within 60 days of delivery [1][2]. - The regulations also prohibit forcing small and medium-sized enterprises to accept non-cash payment methods, such as commercial bills, to prevent the extension of payment cycles [1]. Group 3: Current Payment Practices - Historically, payment terms for suppliers in the joint venture era did not exceed three months, but current practices have extended average payment terms to over 170 days, with some exceeding 240 days [3]. - Some Tier 1 suppliers report payment terms extending beyond eight months, and upstream suppliers often face even longer terms, exacerbating financial strain on smaller suppliers [3]. Group 4: Challenges with Commercial Bills - Commercial bills, which can have a redemption period of 3-6 months, force suppliers to choose between longer payment terms and accepting discounted payments [4][5]. - The discount rates for commercial bills can be significantly high, with some reaching up to 11% for six-month periods, further impacting suppliers' cash flow [4]. Group 5: Ambiguities in Payment Terms - Despite commitments to a 60-day payment term, there are ambiguities regarding when this term begins, as it can vary based on delivery, acceptance, and invoicing processes [6][7]. - Suppliers have expressed skepticism about the sincerity of these commitments, viewing them as potentially empty promises, given the historical context of payment practices in the industry [7].