Chongqing Changan Automobile (000625. SZ) rejected local media reports that it arbitrarily lowered supplier payments by 10% in a statement to Reuters on Wednesday.
Due to raw material costs, demand, supply, and product improvements, the state-owned manufacturer claimed it negotiated prices with suppliers periodically. It denied receiving supplier letters complaining about payment cuts.
According to screenshots of a letter initially shared on Chinese social media late on Monday, some Changan suppliers wrote to the automaker after it slashed their payments by 10%, alleging they were unfairly paying for the industry’s brutal price battle.
Two supplier sources told Reuters that Changan received the procurement department letter.
One source said Changan urged larger suppliers to drop their pricing by less than 10%.
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