With the ongoing rise in raw material costs, both automobile manufacturers and their suppliers are experiencing significant pressure on their expenses. Shanghai General Motors has confirmed to reporters that it has no immediate plans to raise vehicle prices in China, stating that increased production efficiency will help absorb rising part costs.
In the automotive supply chain, after-sales parts face less competitive pressure compared to new vehicle pricing, which has helped ease some of the cost burdens. However, the situation is far from stable. Industry sources indicate that tire prices have surged the most since the start of this year, with increases ranging from 5% to 10%. Other auto parts have also seen price hikes, with some components rising by as much as 20% to 30%.
Car accessories have also experienced notable price increases. Many car owners are now facing higher repair and maintenance costs. According to some suppliers in Shanghai, approximately 20% of auto parts have seen price increases of 20% to 30%. For example, the average car battery has gone up from 270 yuan to 400 yuan, while common antifreeze prices have risen by 50% per barrel. Parts such as water tanks, crankshafts, and electrical components—typically not replaced frequently—have seen modest increases of around 10%. Meanwhile, wear-and-tear items like hoods, bumpers, and fasteners have seen more dramatic price jumps, with some hoods increasing from 300 to 400 yuan. Freight truck hubs have also risen significantly, with front hubs moving from 250 to 280 yuan and rear hubs from 300 to 400 yuan. Some imported rare parts have even seen price increases approaching 30%.
Tire companies are also adjusting their pricing strategies. Michelin announced a 3% average price increase for engineering and industrial tires in the U.S. and Mexico starting February 1st. Bridgestone raised prices for its branded car and truck tires by 3% to 5% in March. U.S.-based Continental Group also increased tire prices in the first quarter of this year. Hankook Tire plans to raise prices for tires sold in China by 5% to 8% starting in February.
Car dealers are increasingly relying on after-sales services to maintain profitability. Industry data shows that in 2007 alone, due to rising raw material costs, the cost for third-tier suppliers increased by about 80%, while second-tier suppliers like gears and axles saw an 8.7% year-on-year increase. Drive axle companies faced a 10.7% cost rise, and suspension bridge suppliers saw a 13% increase. A parts supplier mentioned that as iron ore prices climbed, cast iron prices surged, making the cost of iron-based auto parts unavoidable.
Despite these challenges, most automakers are hesitant to pass on the full cost to consumers. A spokesperson from Shanghai Volkswagen stated that the company would not make large-scale adjustments to market guide prices. Similarly, Shanghai General Motors told reporters that it has no immediate plan to increase vehicle prices in China, emphasizing that production efficiency improvements will help manage rising part costs.
The after-sales service market is becoming a key revenue source for dealers. Industry insiders revealed that with growing production scale and higher localization rates, auto parts should be cheaper by 10% year-on-year. However, this is proving difficult to achieve. In the domestic after-sales market, the total cost of replacement parts often doubles the sales price of the vehicle itself. After aggressively expanding their market share through price competition, multinational dealers remain confident in the potential of the parts and service market. As production costs continue to rise, vehicle prices may fall, but parts prices are likely to keep increasing. Car owners typically have more rigid demand for after-market parts and services than new vehicle buyers.
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Printech printed prepainted steel is a type of steel that has been coated with a special type of paint that allows high-quality printing to be applied onto the surface of the steel. The surface of the steel is first cleaned and treated with a primer to ensure that the paint will adhere properly. Then, a special ink is applied to the surface of the steel using a printing process, which can create a wide range of colors, patterns, and designs.
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