For an extended period, suppliers in the automotive industry have grappled with the issue of "delayed payments".

To address this, two months ago, 17 automakers responded to relevant regulations by jointly pledging to settle supplier payments within 60 days.

Now, some automakers have taken the lead in delivering on this promise.

On August 11, the Ministry of Industry and Information Technology announced that FAW Group, GAC Group, and Thalys Group have fulfilled their commitments and become the first batch of automakers in the industry to "walk the talk".

Leading by Example: Three Automakers Break the Impasse

FAW, GAC, and Thalys didn't just talk the talk; they walked the walk.

In terms of funding, they swiftly collected revenue from car sales, revitalized idle funds, and utilized loan quotas to secure sufficient funds for supplier settlements.

They were also relentless in overhauling acceptance, approval, contract terms, and other processes. Previously, payment terms often exceeded 90 days, but now they are strictly adhered to within 60 days, eliminating the institutional possibility of delayed payments.

This "funds + process" approach sets a replicable model for other automakers.

Industry Status: Most Still on the Path to Compliance

Aside from these three automakers, the remaining automakers that made the pledge are only striving to settle new orders within 60 days, with slow progress in revising old orders.

Xu Haidong, Deputy Secretary-General of the China Association of Automobile Manufacturers, stated: "Currently, major state-owned enterprises like FAW, Dongfeng, and Chang'an, as well as GAC, SAIC, and BAIC, along with private enterprises like Geely and Great Wall, and new entrants like Thalys, Li Auto, and XPeng, are all actively responding to the pledge."

These enterprises face two primary hurdles:

First, their cash flow cannot support the change. Shortening payment terms requires advanced spending, necessitating a complete overhaul of fund arrangements for enterprises with fluctuating sales or those expanding their facilities.

Second, contracts for old orders have been finalized for a long time, involving numerous supply chain links that need to be negotiated and revised individually, a process that cannot be completed in the short term.

Ultimately, China's automotive supply chain aims to leverage this initiative for "credit upgrades" – faster capital flows and enhanced cooperation trust, enabling Chinese automakers to gain a stronger foothold in global competition.

In the coming days, more automakers will face the test of adhering to 60-day payment terms. It won't be long before we see who can honor their commitments and who struggles to meet the deadline.