Own-brand automakers to raise price due to soaring costs

Shanghai, May 15 (Gasgoo.com) The impact of soaring raw material costs upon the domestic auto industry is looming large. Two weeks ago, Chery, the nation's fourth largest car maker, added an average of 2,000 yuan (US$285.71) to 3,000 yuan to the prices of its mainstream products. Then some home-grown automakers began to raise prices.

Following Chery, Jianghuai Auto also raised the price of its Binyue lineup by 5,000 yuan from May1, the same day when Changhe Suzuki added 5,000 yuan to its Landy lineup. Several days earlier, Haima Auotmobile has raised the price of its1.6L manual Family brand by 500 yuan. Even before, the Zhonghua Brilliance coupe had its price up by 7,100 yuan as it was just delivered to the market. However, own-brand automakers are actually reducing their special offers instead of an overall price rise.

Data collected by the Price Monitoring Center of the National Development and Reform Commission showed that in March prices of the national auto market rose 0.13% over the previous month, down 3.17% year-on-year(y/y). Due to soaring raw material costs, prices of passenger cars dropped slightly 0.18% over the previous month, while those of basic passenger cars rose 0.95% month on month.

Joint ventures and most own-brand automakers still keep silent facing some own-brand cars' price rising. Analysts said domestic car makers developing self-branded vehicles are more vulnerable (than joint venture auto makers) to recent price hikes in steel and iron ore because they have thin profit margins.