Gasgoo Munich- On February 12, the China Association of Automobile Manufacturers (CAAM) released a report tracking how key automakers are honoring their promises to pay suppliers on time. Last June, 17 major automakers pledged to cap payment terms at 60 days in response to updated State Council regulations protecting small and medium-sized enterprises (SMEs). Now, most have met that target, cutting the average payment period to 54 days — 10 days shorter than a year ago. Four firms have even brought their average below 50 days, marking significant progress in fulfilling these commitments.
Image source: Screenshot from CAAM report
Payment methods are also being streamlined. Fifteen companies now rely exclusively on cash or bank acceptance bills, with only a few still using commercial acceptance bills. Two firms that had been using electronic accounts payable vouchers have pledged to phase them out. Cash payment ratios are rising: five companies are paying over 50% in cash, and two exceed 70%, significantly improving efficiency and flexibility.
Support for smaller suppliers is notable. All 17 automakers have ensured that payment terms for SMEs do not exceed 60 days from the date of delivery and acceptance. Fourteen have introduced additional incentives, two are paying SMEs entirely in cash, and five allow financially strained suppliers to apply for early payment. These measures are materially alleviating cash-flow pressure on smaller businesses.
To enforce these commitments, every major automaker has established dedicated oversight mechanisms. Many have formed task forces and issued policy documents to adjust terms in existing contracts. Some have optimized financial workflows and upgraded IT systems to automate regular payments. Others have shifted the payment term start date to the day of delivery acceptance and transitioned from monthly to 10-day settlement cycles, significantly improving efficiency. Several firms have also earmarked over 10 billion yuan to improve payment speed.
Image source: VCG
CAAM clarified that the survey calculates payment periods from acceptance and reconciliation to actual payment. Financial reports may show longer timelines due to differing statistical scopes. The association also noted that bank acceptance bills—industry standards due to their high credit rating and liquidity—are widely accepted by suppliers.
The survey also revealed persistent industry issues. Some automakers use varying starting points for the calculation—such as delivery, centralized reconciliation, invoice receipt, or vehicle loading verification. While all claim a 60-day term, the actual time from delivery to payment varies widely, indicating lax process management and disguised extensions of payment periods. A few companies have even used the push for shorter terms as leverage to demand price reductions or other unreasonable concessions from suppliers.
In response, CAAM stated it will continue to monitor compliance and urge automakers to strictly and promptly honor their commitments. The association called for stronger industry self-discipline to maintain a fair and honest market environment and build a supply chain ecosystem defined by efficient collaboration and mutual benefit.
