Steel and Precious Metals Drive Up Auto Prices

After a period of relative stability in the latter half of FY25, the auto industry is facing renewed pressure as commodity prices begin to harden once again. Companies are responding with incremental price increases to offset these rising costs.

Analysts Warn of Continued Price Hikes

Recent analyst reports have highlighted a steady increase in raw material prices, especially steel, over the past two quarters. Auto executives, including Rajesh Jejurikar of M&M, acknowledge the challenge but remain hopeful that cost reduction strategies and product mix adjustments can mitigate the impact.

"Steel is up 6% over last quarter," Jejurikar noted, emphasizing the potential for continued inflation to become a significant obstacle.

Future Outlook

Experts predict that raw material costs will continue to rise in the coming quarters, potentially squeezing margins. However, the current impact is manageable, with most companies reporting a minimal effect on their gross margins thanks to earlier price adjustments.