Hike in steel prices to compound cost woes for Indian automakers
Domestic steelmakers’ decision to hike prices is likely to compound cost woes for Indian automakers already experiencing a spiralling of costs to prepare for the implementation of Bharat Stage VI emission norms on top of declining sales. While auto companies are monitoring price contracts with steelmakers, any cost escalation beyond a level will make vehicles dearer for consumers, which may further impact demand, industry insiders said. The auto industry reported a 5% overall fall in sales in January, and demand remained tepid in February even in an environment of heavy discounting by original equipment manufacturers (OEMs).
“We would like the raw material costs to be stable, which will allow us to maintain stable vehicle pricing to the end consumers,” said N Raja, deputy managing director at Toyota Kirloskar. “Any adverse price hike will likely impact end prices to the consumers.”