Vehicle price hikes to limit impact of rising costs for auto OEMs: Ind-Ra ANI | Updated: Feb 20, 2021 16:47 IST
Mumbai (Maharashtra) [India], February 20 (ANI): Although increasing input prices will impinge on near-term profitability of auto original equipment manufacturers (OEMs), they are likely to benefit from recent price hikes over the medium term as input prices normalise, according to India Ratings and Research (Ind-Ra).
The reduction in steel import duty under the Union Budget 2021-22 proposal will not have any material impact on commodity prices as domestic steel prices, despite being at peak levels, are still below the landed import prices.
In terms of value, metals cost directly account for 8 to 16 per cent of revenues on parts like body, chassis, powertrain, engine components and wheel rims. Additionally, metals are used in certain other components, child parts and sub-assemblies, which is difficult to quantify.
Although increasing input prices will impinge on near-term profitability of auto original equipment manufacturers (OEMs), they are likely to benefit from recent price hikes over the medium term as input prices normalise, according to India Ratings and Research (Ind-Ra).
The reduction in steel import duty under the Union Budget 2021-22 proposal will not have any material impact on commodity prices as domestic steel prices, despite being at peak levels, are still below the landed import prices.
In terms of value, metals cost directly account for 8 to 16 per cent of revenues on parts like body, chassis, powertrain, engine components and wheel rims. Additionally, metals are used in certain other components, child parts and sub-assemblies, which is difficult to quantify.