Cost growth to drive China's commercial vehicle prices up

Shanghai, April 11 (Gasgoo.com) China's automakers have begun to raise the prices of their commercial vehicles in response to the growing costs of raw materials for auto-making, said Shanghai Securities News on Thursday. Prices of all light-duty and heavy-duty trucks in the Chinese market have been rising considerably these months.

The shortage of auto parts has driven up the prices of commercial vehicles, which are still in short supply even if they are more expensive than before. Since the beginning of 2008, prices of most commercial vehicles have increased. Foton and Jinbei light trucks' prices have been marked up more than two times over the past three months.

Some truck dealers told the newspaper that the prices of light truck series of FAW have also increased by a range between 1,000 yuan ($143) and 2,500 yuan, and Jianghaui Auto has raised the prices of its light truck by 2,000 yuan--4,000 yuan. Other light trucks have their prices raised at least 700 yuan.

An industry analyst said that heavy trucks in China have also become more expensive these few months, with their prices increased by 4,000 yuan--10,000 yuan. The average price of Chinese-made heavy trucks is about 300,000 yuan and now it has risen by 2%-3%. The biggest price increase of some heavy truck has hit 60,000 yuan.

Most manufacturers said that the root cause for the price increase in the truck segment is the rising costs of making these vehicles. Steel and plastic are the major raw materials of auto manufacturing. This year the prices of iron ore has rocketed and thus driven up the cost of steel components used for car-making. And the rising price of oil, the raw material for making plastic, has caused the price of plastic components to grow.

Industry insiders said that the price increase of raw materials will push higher the manufacturing costs and market prices of commercial vehicles, and the shortage of vehicle components is unlikely to be eased in the near future, but is more likely to escalate.

There's no need and no time to bargain over the prices now if you want to buy a commercial car, because cost growth is outpacing price increases, some commcercial vehicle makers and dealers said.