Fulfilling Payment Term Commitments: Key Automakers Take Action!

In June of this year, 17 major automakers across China actively responded to the revised Regulations on Ensuring Timely Payments to Small and Medium Enterprises by the State Council, publicly committing to "payment terms to suppliers not exceeding 60 days." On July 9, the Ministry of Industry and Information Technology launched an "Online Feedback Window for Automakers’ Payment Term Commitments" to further ensure compliance.

To strictly fulfill their commitments, FAW (China First Automobile Works) established a cross-departmental task force, creating a closed-loop management system from process to supervision, transforming policy from an "administrative requirement" into a "long-term mechanism." GAC Group upheld the principle of "paying suppliers within 60 days" as an ironclad rule, building a control system covering the entire process from "order placement—inspection and warehousing—reconciliation—payment." Seres not only fulfilled its payment obligations on time but also ensured compliance through its innovative "factory-within-a-factory" model. Below are the specific practices and results of these three automakers.

FAW (China First Automobile Works)

Closed-loop management turns the 60-day payment commitment into a long-term mechanism. FAW took the lead in optimizing processes and strengthening supervision, translating commitments into action and setting an example for "whole-supplier" collaboration in the automotive industry.

End-to-end restructuring: Ensuring every payment is strictly bound.
To implement the "payment terms not exceeding 60 days," FAW formed a cross-departmental task force (finance, supply chain, legal) to establish closed-loop management from process to supervision. Departments clarified responsibilities, ensuring seamless collaboration at every stage. A joint task force conducted in-depth research across business units, identifying potential issues in procurement and settlement processes. By refining institutional frameworks, FAW standardized acceptance rules, improved transparency, and prevented delays caused by ambiguous procedures.

Supervision ensures full compliance.
The finance department monitors accounts payable monthly via system oversight, while the audit department includes debt clearance in its supervision. Complaints channels for delayed payments are publicly available, enabling social oversight. Units failing to meet payment deadlines face performance deductions.

Targeted support: Directing capital to the supply chain’s edge.
FAW introduced special support for SMEs. Starting June 2025, all certified SME suppliers receive 100% cash payments, replacing the previous "cash + bank acceptance drafts" model.

The value of optimized payment terms goes beyond efficiency. Amid intensifying industry competition, FAW’s measures are transforming "OEM-supplier" relationships from transactional to collaborative partnerships. Timely payments enhance supply chain stability, with many suppliers now prioritizing FAW orders.

From process optimization to cash guarantees, internal controls to social oversight, FAW proves that payment commitments are not just slogans but actionable, systemic practices. These efforts not only support suppliers financially but also promote a "win-win collaboration" ethos in the automotive industry.