China automakers face financial struggles due to price wars and overcapacity

China’s auto industry faces challenges from overcapacity and price wars, prompting leaders to address the issue. Financial data from 33 automakers in China shows a decline in key metrics due to a price war that began in 2023. New regulations require large companies to settle payments within 60 days, aiming to level the playing field. Some automakers, like BYD and Geely, have seen an increase in payment periods to suppliers, while Great Wall Motor Co has shortened its cycle. Overall, the sector’s inventory levels and debt have risen significantly, impacting profit margins. Nio Inc and Xpeng Inc have long payment periods to suppliers but are working to improve their negative margins.

Read more at Yahoo Finance: China automakers’ price war, overcapacity hurt finances