Chinese automakers pledge to make payments to suppliers within 60 days

[SHANGHAI] Most Chinese automakers have pledged to make payments to suppliers within 60 days, responding to regulatory pressure that followed a recent outcry from suppliers over long payment times and other practices they call unfair.

Chinese authorities issued new rules in March that require big companies to settle most payments with suppliers within 60 days that became effective June 1. Even so suppliers had been worried that there were loopholes for the rules to be circumvented.

The pledges come after China’s industry ministry summoned automakers to a meeting last week where they were told to put an end to a brutal price war and excessive competition – factors which have put tremendous pressure on the industry’s supply chain.

Automakers issuing pledges on Wednesday included BYD, Chery and Geely. State-owned Guangzhou Automobile Group and FAW Group made their pledges on Tuesday evening. REUTERS