With the start of the new year, most automobile companies have increased the price of their vehicles. And now once again, auto companies are in the mood to raise the prices of their vehicles again. The reason for this is that car companies are believed to be unable to provide steel according to the demand. Recently, it has been reported that Maruti Suzuki will increase the price of its vehicles from April.
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In fact, once again the price of steel has increased, in such a situation, many auto companies can increase the prices of their vehicles again. The rise in raw material costs is set to trigger a second round of price increases in the auto industry, with manufacturers indicating a 1-3 percent markup. Companies like Mahindra & Mahindra, Eicher Motors and Ashok Leyland may hike prices in April-May, neutralizing the sharp rise in the cost of steel, aluminum and other metals. At present, steel companies are fulfilling 60-70 per cent of the orders of the vehicle companies. If the condition remains the same, the situation may worsen in the coming time. Excess export of finished steel is being considered as a major reason for this.
These companies also gave indications to increase the price
Eicher Motors MD Siddharth said, “We will probably increase prices again in April. Till now we have launched products in India and at global level, but due to the increase in the prices of raw materials, the price of our vehicles has also increased rapidly. ”At the same time, the prices of Royal Enfield motorcycles will also increase. .
Ashok Leyland CFO and director Gopal Mahadevan said, “We have already raised prices in October and then in January but steel prices have increased significantly. If this continues, we will have no option but to raise prices. ”
Vikas Bajaj, president of the Association of Indian Forging Industry, said that steel mills had demanded another price of Rs 7,250 per tonne in January, but that demand has been weakened. Bajaj said, “Now discussions are going on between OEMs and steel mills and some price increases will be agreed, but the problem is supplied.” If the company orders 100 tonnes, only 20-30 tonnes of steel are being made available. The increase in steel prices has also affected forging steel manufacturers, as steel is usually 60–65% of the pre-factory price of forgings.
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Price of steel increased by 60 percent in one year
In terms of prices, the price of steel has increased by 60 percent in the last one year. With this, the price of domestic steel has gone up to Rs 57,250 per tonne. A year ago, the price of steel was around Rs 37,500 thousand per ton. Auto sector accounts for 15 to 17 percent of the total steel being consumed in India. This is the reason that most vehicle companies have increased the prices of their vehicles from 2021 and many more companies can increase their prices even further. It also includes the names of Hyundai, Mahindra and two-wheeler manufacturers.
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