Maruti Suzuki India’s senior govt director – advertising and marketing and gross sales – Shashank Srivastava mentioned, “With commodity costs rising within the final one-and-a-half years, Maruti has elevated the costs of its automobiles however solely marginally.
Our whole value improve within the final two years has been about 13%-14%, whereas the rise in commodity costs has been a lot larger. In that sense, the rise in commodity costs has not been handed on to the patron within the final one-and-a-half years.”Steel, plastic and related uncooked supplies comprise roughly 75%-77% of the manufacturing price of a passenger car.“Steel costs was once `38 per kg about one-and-a-half or two years again, and now they’re round `80 per kg.
An improve in export obligation will improve the home availability, which can hopefully cut back the spot costs for metal,” Srivastava mentioned, including that when spot costs lower, the contracts that producers have with metal producers for the subsequent quarter are at a lower cost.
According to Srivastava, even when there’s a drop in metal costs, it might nonetheless be larger than what it was once one-and-a-half or two years again.Sanjeev Kumar, head – MHCV, Ashok Leyland, mentioned that the federal government’s latest resolution to decrease import duties on among the main uncooked supplies like coke, utilized in metal manufacturing, will assist metal producers in managing their prices.
“As you are aware that steel prices have risen substantially in the last one year, and we are unable to pass on these costs to customers as it would make it unviable for end customers. Having said that, we are constantly monitoring the situation,” Kumar mentioned.
Most of the producers have already elevated costs of passenger and business automobiles twice up to now in CY2022 — first in January and just lately in April.
“The decision to cut import duty on steel is a welcome move for the auto manufacturers as they have been reeling under cost pressures for quite some time now. It should shield them from international externalities and stabilise the fluctuations in input costs,” mentioned Suraj Ghosh, director, mobility, S&P Global.
However, Ghosh famous that with the type of price pressures and unsure sourcing atmosphere that the auto producers are in, it’s unlikely that they may announce value cuts.Grant Thornton Bharat accomplice and auto sector chief Saket Mehra mentioned that the federal government’s latest bulletins will present some respite to the auto and auto part producers, and allow higher offers with metal producers.
While producers have already been burdened with excessive commodity costs and provide chain disruptions because of the semiconductor scarcity, Mehra mentioned that this transfer will permit them to convey some steadiness in managing enter prices. “This reduction in cost may or may not be passed to the end consumers,” he added.
Source: www.financialexpress.com”