Over a dozen Chinese automakers including BYD Geely, and Xiaomi have pledged that they will settle payments with their suppliers within 60-days — the latest development in Beijing’s vow to take strict measures against the increasingly disorderly and vicious competition in auto industry. The commitments are in line with new rules that were introduced by Chinese authorities in March, and which became effective this month. They aim to reduce the length of payment cycles for small and mid-sized businesses. Reuters reported that the announcements come a week following a demand by China’s Industry Ministry for automakers to stop their price-cutting actions. According to Citic Securities, payments to suppliers of automakers like BYD, Changan, and Geely typically take over 150 days, compared to 90 days for Tesla.[Reuters (19459026), TechNode Reporting]
