-- Shorter payment periods to suppliers amid the government's anti-involution campaign will pressure Chinese automakers' working capital, S&P Global Ratings said in a recent release.
The truncated payment periods will dampen the carmakers' liquidity and increase their borrowing needs, S&P said.
The government also persuades car companies to pay their small and midsize suppliers within 60 days after delivery to narrow their financial burden, S&P credit analyst Stephen Chan said.
Anti-involution could relax price competition, but it will also pressure carmakers' cash flow generation during the transition part, the analyst said.
Constrained cash flow will potentially boost funding needs and quicken market consolidation, the rating agency said.