Car companies collectively commit to reducing payment terms to 60 days, experts say payment methods should also be standardized

On June 11th, various car companies recently announced the reduction of supplier credit terms to within 60 days, in response to the requirements of the country and relevant departments to ensure the stability of the industrial and supply chains and promote the high-quality development of the automotive industry. Zhang Hong, a member of the Expert Committee of the China Automobile Dealers Association, pointed out that in the past, automobile supply chain enterprises generally faced long repayment cycles, sometimes as long as 9 months or even longer, which led to a tight capital chain for many small and medium-sized supporting businesses, and had to rely on discounting, short-term loans and other methods to maintain operations. Shortening the payment term can alleviate the financial pressure on suppliers, enhance their business resilience and innovation capabilities. However, relying solely on verbal promises of a 60 day payment term from various car companies may not necessarily guarantee that suppliers can receive timely payments. Payment methods should also be standardized, such as requiring the use of cash and prohibiting the use of 6-month acceptance bills, to truly eliminate the phenomenon of delayed payment.