The Ministry of Industry and Information Technology of China supports automakers in committing to limiting payment terms to suppliers to no more than 60 days, stating that this measure will contribute to the healthy and sustainable development of the automotive industry.
According to reports from Xinhua News Agency and China Central Television, 17 key Chinese automobile enterprises, including FAW, Dongfeng, GAC, Seres, and BYD, have recently issued statements making a commitment to limit their payment terms to suppliers to no more than 60 days.
In response to a reporter's question about this situation on Thursday (June 12), a representative from MIIT stated that automakers proactively committing to payment terms not exceeding 60 days is significant for building a win-win development ecosystem between complete vehicles and components, and for promoting the healthy and sustainable development of the industry.
The representative noted that as the pace of transformation and upgrading in the automotive industry accelerates, and competition in the new energy vehicle market intensifies, competitive pressures are being transferred from complete vehicles to various parts of the supply chain, resulting in extended payment terms to suppliers and difficulties with cash flow, which are detrimental to technological innovation and the healthy and sustainable development of the industry.
The representative expressed that the ministry supports complete vehicle enterprises in earnestly fulfilling their commitments, and will continue to guide complete vehicle enterprises in establishing long-term stable cooperative relationships with supply chain enterprises, promoting integration and collaborative development among large, medium, and small enterprises, fostering a positive environment where a "rising tide lifts all boats," continually enhancing the resilience and security level of the industrial and supply chain, and making new contributions to the global automotive industry development.
The representative emphasized that China's new energy vehicle industry is currently at a critical juncture of high-quality development, and hopes that many enterprises will lead by example, strengthen industry self-discipline, and also call on all sectors of society to care about and support the high-quality development of the new energy vehicle industry, jointly resisting "network trolls," "black public relations," and other online disorders, and creating a positive, upward, and orderly development environment.
According to Bloomberg, Chinese state-owned car companies Dongfeng Motor Group, Guangzhou Automobile Group, and First Automobile Group, as well as private automaker BYD, have recently issued statements, expressing that they will adhere to the 60-day payment terms to promote efficient fund operation in the automotive industry chain.
As China's automotive market has entered a prolonged price war, profit margins for most car companies have been continuously compressed. To maintain competitiveness, these car companies have been forced to significantly cut costs, tighten cash flows, and extend supplier payment cycles.
According to reports from Xinhua News Agency and China Central Television, 17 key Chinese automobile enterprises, including FAW, Dongfeng, GAC, Seres, and BYD, have recently issued statements making a commitment to limit their payment terms to suppliers to no more than 60 days.
In response to a reporter's question about this situation on Thursday (June 12), a representative from MIIT stated that automakers proactively committing to payment terms not exceeding 60 days is significant for building a win-win development ecosystem between complete vehicles and components, and for promoting the healthy and sustainable development of the industry.
The representative noted that as the pace of transformation and upgrading in the automotive industry accelerates, and competition in the new energy vehicle market intensifies, competitive pressures are being transferred from complete vehicles to various parts of the supply chain, resulting in extended payment terms to suppliers and difficulties with cash flow, which are detrimental to technological innovation and the healthy and sustainable development of the industry.
The representative expressed that the ministry supports complete vehicle enterprises in earnestly fulfilling their commitments, and will continue to guide complete vehicle enterprises in establishing long-term stable cooperative relationships with supply chain enterprises, promoting integration and collaborative development among large, medium, and small enterprises, fostering a positive environment where a "rising tide lifts all boats," continually enhancing the resilience and security level of the industrial and supply chain, and making new contributions to the global automotive industry development.
The representative emphasized that China's new energy vehicle industry is currently at a critical juncture of high-quality development, and hopes that many enterprises will lead by example, strengthen industry self-discipline, and also call on all sectors of society to care about and support the high-quality development of the new energy vehicle industry, jointly resisting "network trolls," "black public relations," and other online disorders, and creating a positive, upward, and orderly development environment.
According to Bloomberg, Chinese state-owned car companies Dongfeng Motor Group, Guangzhou Automobile Group, and First Automobile Group, as well as private automaker BYD, have recently issued statements, expressing that they will adhere to the 60-day payment terms to promote efficient fund operation in the automotive industry chain.
As China's automotive market has entered a prolonged price war, profit margins for most car companies have been continuously compressed. To maintain competitiveness, these car companies have been forced to significantly cut costs, tighten cash flows, and extend supplier payment cycles.