In response to mounting backlash over delayed payments and a deepening price war, major Chinese automakers including BYD, Chery, Geely, SAIC, BAIC, Xpeng, and Xiaomi have pledged to pay suppliers within 60 days, aligning with new government rules that came into effect on June 1.
The announcement follows intense criticism from the China Iron and Steel Association, which warned that steel suppliers are facing liquidity strains and shrinking profit margins. The group accused automakers of demanding more than 10% price cuts and delaying payments for months.
Government Push & Industry Response
China’s Ministry of Industry recently held a meeting with automakers, pressuring them to end the destructive price war and ease the burden on suppliers. New regulations now legally require large companies to settle most supplier payments within 60 days, although suppliers had expressed concerns about potential loopholes.
In their public statements:
However, none of the companies clearly stated what qualifies as the start of the 60-day clock or whether payments will be in cash.
Mounting Pressure from Supply Chain and Dealers
The auto industry’s cutthroat competition since early 2023 has led to extreme discounting, putting a squeeze on dealers and suppliers alike. Many dealers say they are being flooded with inventory, leading to cash flow problems and in some cases, store closures.
Great Wall Motor’s chairman, Wei Jianjun, has compared the situation to Evergrande's collapse, suggesting the auto industry is similarly heading toward a credit crunch.
Industry Experts Weigh In
Yang Hongze, chairman of Autolink, welcomed the pledges as a step toward healthier supply chain practices but stressed the need for transparency and enforcement:
“It is a pleasant but difficult change... but we still need clarity on whether we’ll get paid in cash or paper, and when the 60-day clock really starts.”
The situation remains fluid, with suppliers hoping these pledges signal a real shift toward fairer, more sustainable practices in China’s EV-dominated auto sector.
President Vladimir Putin held a phone conversation with North Korean leader Kim Jong Un on Tuesday, informing him about his scheduled meeting with U.S...
On Tuesday, a lawyer for California told a federal judge that the Trump administration’s use of National Guard troops in Los Angeles during immigrat...
On Tuesday, Brazil’s President Luiz Inacio Lula da Silva announced a $5.55 billion credit plan to support exporters affected by recent U.S. tariff h...
On Tuesday, Mexico extradited 26 suspected cartel members to the U.S. during increasing pressure from President Donald Trump to crack down on powerful...
Taylor Swift announced her 12th studio album, The Life of a Showgirl, on a podcast with NFL star Travis Kelce, revealing pre-orders for vinyl, cassett...
U.S. and Chinese trade officials plan to meet again in the coming months to discuss their economic relationship, as the two countries extended a tariff truce for 90 days.
Chinese authorities have summoned major tech firms, including Tencent and ByteDance, over their purchases of Nvidia’s H20 AI chips, raising concerns about information security and urging companies to rely on domestic suppliers amid escalating regulatory scrutiny.
On 12 August, Azerbaijan’s Foreign Minister Jeyhun Bayramov spoke by phone with Armenian Foreign Minister Ararat Mirzoyan.
The world’s biggest dance music festival faces an unexpected setback as a fire destroys its main stage, prompting a last-minute response from organisers determined to keep the party alive in Boom, Belgium.
A powerful eruption at Japan’s Shinmoedake volcano sent an ash plume more than 3,000 metres high on Sunday morning, prompting safety warnings from authorities.
According to the German Research Centre for Geosciences (GFZ), a magnitude 5.7 earthquake struck the Oaxaca region of Mexico on Saturday.
A resumption of Iraq’s Kurdish oil exports is not expected in the near term, sources familiar with the matter said on Friday, despite an announcement by Iraq’s federal government a day earlier stating that shipments would resume immediately.
'Superman' continued to dominate the summer box office, pulling in another $57.25 million in its second weekend, as theatres welcome a wave of blockbuster competition following a challenging few years for the film industry.
President Vladimir Putin held a phone conversation with North Korean leader Kim Jong Un on Tuesday, informing him about his scheduled meeting with U.S. President Donald Trump in Alaska later this week, according to the Kremlin.
On Tuesday, a lawyer for California told a federal judge that the Trump administration’s use of National Guard troops in Los Angeles during immigration enforcement operations was illegal, violating the Posse Comitatus Act (PCA), which restricts military involvement in civilian policing.
On Tuesday, Brazil’s President Luiz Inacio Lula da Silva announced a $5.55 billion credit plan to support exporters affected by recent U.S. tariff hikes, with additional backing through government purchases expected.
On Tuesday, Mexico extradited 26 suspected cartel members to the U.S. during increasing pressure from President Donald Trump to crack down on powerful drug organizations and combat the fentanyl crisis.
U.S. and Chinese trade officials plan to meet again in the coming months to discuss their economic relationship, as the two countries extended a tariff truce for 90 days.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment