Core Viewpoint - The automotive industry in China is making progress in addressing payment terms, with major companies committing to pay suppliers within 60 days, as highlighted by the China Automobile Industry Association's initiative [1][4]. Group 1: Payment Term Improvements - A total of 11 A-share listed passenger car companies reported a decrease in accounts payable turnover days in Q3 2025, with GAC Group having the shortest at 76.14 days and Qianli Technology the longest at 154.61 days [2]. - Notably, Beiqi Blue Valley saw a significant reduction from 112.32 days to 83.79 days, a drop of 28.53 days or 25% [2]. - Despite improvements, some companies like SAIC Group and Changan Automobile still have substantial accounts payable, with SAIC reporting 76.9 billion yuan in payable notes [2][3]. Group 2: Cash Flow Management - Most car companies maintained positive cash flow in Q3, with SAIC, Great Wall Motors, and Changan reporting over 10 billion yuan in operating net cash flow, while BYD exceeded 9 billion yuan [3]. - However, some companies are experiencing cash flow pressures, indicating a mixed financial health across the industry [3][7]. Group 3: Best Practices from Leading Companies - GAC Group has consistently kept supplier payment terms under 60 days, utilizing a digital management system for real-time tracking of payment processes [5]. - Seres has innovated with a "factory within a factory" model, reducing transportation time and costs, thereby facilitating smoother payment execution [6]. - China FAW has implemented a 100% cash payment policy for small and medium-sized suppliers, enhancing cash flow management [6]. Group 4: Challenges and Industry Dynamics - Despite improvements, operational bottlenecks remain, particularly with legacy orders that do not meet the new payment terms [7]. - Suppliers express concerns about potential repercussions for complaints, leading them to prefer negotiation over formal disputes [7]. - The industry faces pressure as some companies struggle to comply with the 60-day payment term without jeopardizing their own cash flow [8].