(Yicai) Sept. 16 -- Shares of companies along the Chinese automotive industry supply chain soared after several automakers, including BYD, SAIC Motor, and Xiaomi Auto, pledged to pay suppliers on time.

Wanxiang Qianchao [SHE: 000559], Langbo Sealing Technologies [SHA: 603655], and Tianlong Electronics [SHA: 603266] closed up by the 10 percent exchange-imposed daily trading limit today. Longhorn Automotive Electronic Equipment [SHE: 301488] climbed 7.2 percent, and Dcenti Auto Parts [SHA: 603335] rose 2.7 percent.

Seventeen Chinese carmakers, such as BYD, Changan Automobile, Chery Automobile, GAC Group, Great Wall Motor, Leapmotor, Li Auto, Nio, Seres Group, Xiaomi Auto, and Xpeng Motors, said yesterday they will actively support the initiative by the China Association of Automobile Manufacturers, urging them to pay suppliers within 60 days.

The longer the payment settlement cycle is, the greater survival pressure on supply chain firms will be, an official from the Ministry of Industry and Information Technology said. The initiative will guide automakers to honor their commitments on payment terms and promote the standardized development of the automotive industry, they added.

Since they first committed to this cause in June, the 17 carmakers have made some progress. For example, Xpeng’s Chairman He Xiaopeng said in July that the new energy vehicle startup was proceeding with the adjustments to its payment period. FAW Group, GAC, and Seres have already shortened their payment periods to within 60 days, the MIIT said in a survey released on Aug. 11.

The accounts payable and notes payable of 14 of the 17 automakers declined in the first half of this year from the end of last year, National Business Daily reported.

Changan Auto, Geely Auto, and SAIC saw the largest amount drops of CNY24.1 billion (USD3.4 billion), CNY10.6 billion, and CNY8.1 billion (USD1.1 billion), respectively. Changan Auto, BAIC BluePark New Energy Technology, and GAC were the top three in terms of percentage decline.

The average payment period of 12 of the 17 carmakers taking on the commitment was about 170 days last year, with BAIC BluePark having the longest at 248 days, followed by Xpeng at 233 days and Changan Auto at 200 days. GAC had the shortest payment cycle of 108 days, while BYD and Geely Auto had relatively shorter times of about 127 days.

Editor: Futura Costaglione