Core Points - 17 automotive companies have committed to shortening supplier payment terms to 60 days, leading to inquiries from suppliers regarding whether the payment cycle for supply chain financial products is included in this period [1] - The acceptance of supply chain financial products varies among suppliers, with bank acceptance being the most favored, followed by commercial acceptance, and the automotive companies' proprietary "chains" being the least accepted due to lower liquidity and higher interest rates [1][2] - Supply chain finance, while criticized, serves a purpose in alleviating cash flow pressures for automotive companies and can eliminate weaker suppliers, provided it is used appropriately [6][8] Group 1: Supply Chain Financial Products - Automotive companies' "chains" are electronic payment vouchers issued to suppliers, functioning similarly to commercial and bank acceptances but relying on the company's creditworthiness [2][3] - Bank acceptance is a widely accepted financial instrument due to the backing of a reputable bank, while commercial acceptance is less favored as it is issued by the automotive companies themselves [3] - The liquidity of automotive companies' "chains" is often lower than that of commercial acceptances, making them less attractive to suppliers [3] Group 2: Supplier Challenges - Suppliers face extended payment periods, with some reporting that the actual payment cycle can stretch to 10-12 months due to delays in invoicing and payment processing [7] - The pressure from automotive companies to lower costs during bidding processes often results in minimal profit margins for suppliers, who may then incur high interest rates for early payment [7] - Suppliers have reported that the interest rates for "chains" are generally higher than those for bank and commercial acceptances, with rates typically around 5% and sometimes reaching 10% [4] Group 3: Industry Context and Regulation - The lack of regulation and oversight in the use of supply chain finance by automotive companies has led to widespread criticism from suppliers, contrasting with practices in Europe and the US where supplier unions can negotiate better terms [8] - Recent government initiatives, such as the "Regulations on Ensuring Payment to Small and Medium Enterprises," aim to address the issues of excessive profit squeezing in the industry [8]