The China Association of Automobile Manufacturers (CAAM) issued on Monday a normative initiative on account payment in procurement contracts between complete vehicle manufacturers and supplier companies, aiming to promote the high-quality and regulatory development of the country's automotive sector.
The overall principle of this initiative is to prevent large enterprises from using their dominant position to infringe on the interests of suppliers and jointly build a collaborative and win-win development ecosystem between complete vehicles and auto parts.
During the order confirmation phase, the vehicle manufacturer and supplier should confirm the order date, part name and specifications, quantity, delivery cycle, and other relevant details through the purchase order. If an effective purchase order needs to be changed or canceled, it should be agreed upon by both parties through negotiation, according to the normative initiative.
Regarding payment and settlement, the payment period for vehicle manufacturers is calculated from the date the supplier delivers the goods and passes the vehicle manufacturer's acceptance inspection, with a maximum period of no more than 60 calendar days.
Regarding contract terms, the initiative encourages both parties to establish a long-term, stable cooperative relationship, with each contract valid for a minimum of one year.
Chinese auto association issues payment standard initiative
