The final outcome of the international iron ore price negotiations has been announced: the price increased by 65% compared to 2007 levels. Since February, major steel companies around the world have frequently announced price hikes. In China, over 20 steel producers raised their product prices again in February, following a similar increase in January. As manufacturing costs—especially steel—continue to rise, the question of whether car prices will go up or down has become a key topic of discussion.
**The Price of Cars is Likely to Rise**
Reasons: The sharp increase in steel prices has created significant cost pressure on the automotive industry. According to preliminary estimates from industry sources, after the "buffering" effects of steel companies and parts suppliers, the cost of stamped parts and steel for each A-class sedan has increased by approximately RMB 1,000. For B- or C-class vehicles, the increase could be even higher. For commercial vehicles, which are major steel consumers, the cost per unit could rise by more than 3,000 to 5,000 yuan, making a price increase almost inevitable.
**Viewpoint 1: The Lowest-Priced Cars Are Most Likely to Rise**
Rao Da, chairman of the National Passenger Vehicles Association, believes that low-end cars with small profit margins may see price increases. In recent years, manufacturers have been continuously cutting costs, and their profit margins have shrunk significantly. With the rapid rise in CPI since 2007, many automakers are under pressure. To maintain efficiency, some may have no choice but to raise prices. Some companies might also use new models as a way to justify price hikes.
**Viewpoint 2: Long-Term Price Reductions Don’t Make Economic Sense**
Su Hui, general manager of the Beijing Beichen Asian Games Village Automobile Exchange Market, noted that in 2007, all commodities saw price increases, except for cars. With rising raw material and labor costs, long-term price reductions for cars do not align with economic principles. Theoretically, car prices should have the potential to increase.
**Viewpoint 3: No Price Increase Means Losses**
Wang Wei, vice president of Changan Suzuki, told reporters that current prices for small and medium-displacement vehicles in China are 20% or even 40% lower than the global average. With steel prices up by 65%, he predicts that mid- and small-displacement vehicle prices will likely rise this year. Li Shufu of Geely Group was more direct, stating that economic cars should increase in price due to rising steel and auto part costs. If they don’t, companies risk losing money.
**Opposition: Price Increases Are Unlikely**
At the end of last November, Baosteel announced a 4.3% to 8% steel price hike for Q1 2008, yet car prices at the start of this year remained stable. Additionally, the National Development and Reform Commission’s price monitoring center predicted that due to factors like supply exceeding demand and fierce competition, auto market prices will continue to fall this year, possibly declining more than in 2007, by over 5%.
**Viewpoint 1: Manufacturers Will Absorb Costs Elsewhere**
Jia Xinguang, a well-known car analyst, said that although Chinese automakers face rising steel prices, the likelihood of direct price hikes is low due to intense market competition. The cost increase mainly affects overall profit margins. Many manufacturers have already found ways to absorb these additional costs through other means.
**Viewpoint 2: Major Groups Remain Unresponsive to Price Hikes**
In the near term, U.S. General Motors has announced plans to raise prices on some 2008 models, while European and Japanese automakers have taken a more cautious approach. Toyota’s president stated that passing on rising costs to finished vehicles is difficult at this stage. In China, while many believe that rising costs threaten profitability, there is no consensus on raising prices. Private automakers and analysts tend to support price increases, whereas large groups and joint ventures with strong market positions are less inclined to follow suit.
Tempered Glass Ink
Tempered
Glass Ink is revolutionizing the world of design and customization. This innovative ink is specially formulated to adhere to tempered glass surfaces, providing a durable and vibrant solution for a variety of applications. Whether you want to add a personalized touch to glassware, electronics, or architectural elements, tempered glass ink offers a versatile and long-lasting option for creating stunning designs.One of the main advantages of tempered glass ink is its exceptional durability. Unlike traditional inks that may wear off or fade over time, tempered glass inks are designed to withstand the rigors of daily use.
Water Based Ink for Tempered Glass,Ink For Heat Resistant Tempered Glass,Environmentally friendly ink,Frosted Ink for Glass Door,High Density Screen Printing Ink
Lauer Water-Based New Material(Foshan)Co.,Ltd. , https://www.lauerink.com