Initiative on Payment Standards for Accounts Receivable from Suppliers of Automobile Whole Vehicle Enterprises

 

In order to promote the implementation of the "Regulations on the Payment of Accounts to Small and Medium-sized Enterprises" in the automotive industry and support key automakers in fulfilling their supplier payment terms commitments with high quality, on the basis of full consultation, the following normative initiatives are made regarding the payment of accounts in the procurement contracts between vehicle manufacturers and supplier enterprises:

 

I. General Principles

 

Adhering to the principles of equality, voluntariness, fairness and good faith, abiding by relevant national laws and regulations, and implementing the requirements of the "Regulations on the Payment of Accounts to Small and Medium-sized Enterprises", we will not take advantage of the dominant position of large enterprises to infringe upon the interests of suppliers. We are committed to building a collaborative and win-win development ecosystem of "whole vehicles - parts", and jointly promoting the high-quality development of the automotive industry.

 

Ii. Key Links

 

(1) Order Confirmation

 

Both Party A (the vehicle manufacturer) and Party B (the supplier enterprise) confirm the order date, names and specifications of parts, quantities, delivery cycles and other matters through the purchase order. If the effective purchase order needs to be modified or cancelled, it should be agreed upon by both parties. Both Party A and Party B agree on the delivery time, place, method and other matters through the delivery notice.

 

(II) Delivery and Acceptance

 

Party B shall deliver the goods to Party A as stipulated in the purchase order and delivery notice. Before delivery, Party B shall complete the factory inspection of the goods to ensure that they are free of defects and the packaging meets the requirements of Party A.

 

2. Party A shall complete the acceptance of the goods in a timely manner after receiving them (in principle, within no more than 3 working days), and issue an acceptance certificate upon successful acceptance. If the variety, quantity or quality of the goods is found to be non-compliant with the requirements, Party A shall promptly notify Party B. Party B shall take rectification, replacement or supplementary supply measures within the specified period. The determination of responsibility and compensation for losses caused thereby shall be handled by both parties in accordance with the contract.

 

(III) Payment and Settlement

 

The payment period for Party A shall be calculated from the date when Party B delivers the goods and they are accepted as qualified by Party A, and shall not exceed 60 natural days at the longest (if the payment date falls on a legal holiday, it will be postponed). If Party B is a non-small and medium-sized enterprise with continuous supply (more than two supply times per month), upon mutual consultation, a centralized reconciliation can be conducted within a certain period of time, and the account period shall be calculated from the date of reconciliation between both parties. Party A shall conduct a centralized reconciliation at least once a month to verify the quantity of goods that have been inspected and accepted as qualified and the corresponding accounts receivable since the previous reconciliation date.

 

2. If the unit price of the supply has not been agreed upon by both parties for the time being, Party A shall make an advance payment based on a certain proportion of the unit price of the most recent supply contract with Party B or the unit price of the designated development point. In principle, this proportion should not be less than 80% of the unit price of the supply contract or 50% of the unit price of the designated development point. After both parties negotiate and determine the price, any excess will be refunded and any shortage will be made up according to the determined unit price of supply.

 

3. Party B shall promptly provide Party A with standardized and auditable invoices after Party A has received the goods and completed the inspection, and Party A shall pay the corresponding accounts receivable accordingly. If Party B fails to provide the invoice within the agreed time, Party A reserves the right to postpone the payment.

 

4. Both Party A and Party B shall negotiate and determine the payment method. Cash (bank transfer, telegraphic transfer, etc.) or bank acceptance drafts are encouraged for payment. If Party B is a small or medium-sized enterprise, it is advocated that all payments be made in cash or by bank acceptance drafts.

 

(4) Contract Term

 

It is advocated that both Party A and Party B establish a long-term and stable cooperative relationship, and the validity period of each signed contract shall be no less than one year.

 

The above proposals are general requirements of the relevant contract terms between Party A and Party B. Other matters shall be separately agreed upon by both parties based on the actual situation.

 

China Association of Automobile Manufacturers

 

September 15, 2025

 

Originally published on China Automotive News Network on September 15, 2025