Shanghai — Chinese car manufacturers have pledged to make payments to suppliers within 60 days, responding to a recent outcry from steelmakers over lengthy payment times and regulatory pressure as the backlash to a punishing price war grows.
Chinese authorities issued new rules in March that require big companies to settle most payments with suppliers within 60 days, which became effective June 1. However, suppliers had been worried there were loopholes for the rules to be circumvented.
Automakers issuing pledges on Wednesday included BYD, Chery and state-owned automakers BAIC and SAIC as well as smaller firms such as Xpeng and Xiaomi.
In its statement, Chery said it would strive to speed up the turnover of capital in the supply chain. But like other automakers, it did not mention how much of an improvement that would represent.
The pledges come after China’s industry ministry summoned automakers to a meeting last week where they were told to put an end to the price war and excessive competition — factors that have placed much pressure on the industry's supply chain.
