Automakers afraid of a price rise

While the prices of commodities like steel, rubber, aluminium and plastic has reached high end limits for the automakers, still the companies are afraid of announcing a price hike in the Indian market due to the fact that the competition is also at its peak in the domestic circuit.

It may be noted here that steel a commodity that is used directly in a vehicle's body and indirectly through components comprises 50% of the total manufacturing costs and has seen a 25% price rise in one year.

However, the increasing competition in both the four-wheeler and the two-wheeler segment is keeping the companies away from announcing a hike in the Indian market. It is believed that aluminium prices have risen 20% over the past 12 months while natural rubber rates have leaped 150% in the same period have been bothering the bottom lines of the automakers in the country.

In fact, companies like Maruti Suzuki and Hero Honda have seen a shock at the start of new financial year as according to the analysts input costs could shave up to 200 basis points off the operating margins of automobile companies.

(topnews.in)