Archive · 11 Jun 2025
Chinese Automakers Pledge to Shorten Supplier Payment Periods
Chinese carmakers are promising to pay their suppliers faster, within 60 days.
This follows concerns from Chinese authorities about the car price war and its impact on the supply chain.
Some carmakers, like BYD, were taking much longer to pay.
The new rules aim to protect smaller businesses, ensuring they get paid on time and not with methods that delay payments.
This impacts the financial health of companies supplying parts to car manufacturers.
Several Chinese automakers agreed to standardize supplier payment periods to 60 days.
The move follows concerns from authorities regarding supply chain financing.
Dongfeng Motor Group Co., Guangzhou Automobile Group Co. and China FAW Group Co. issued statements.
New rules in March mandate 60-day payment terms for businesses.
BYD used a promissory note system and took 275 days to pay suppliers in 2023.
- Who
- Chinese state-owned automakers including Dongfeng Motor Group Co., Guangzhou Automobile Group Co. and China FAW Group Co.
- What
- Chinese automakers agreeing to standardize payment periods to suppliers.
- When
- The agreement was made, following new rules released in March, with the rules taking effect in June.
- Where
- China
- Why
- To promote efficient capital flows and address concerns about the sustainability of the automotive price war.
- Country
- China
- Standardized Payment Period
- 60 days
- Regulation Effective Date
- June
- BYD Payment Delay
- BYD took 275 days to pay suppliers in 2023