Rising steel price is becoming a major cause of concern for the $15 billion auto components sector that is already in trouble due to a lower demand in the domestic market, while exports have also suffered because of a stronger rupee. Components makers are of the view that the price of steel used in the component sector has risen by as much as 25 per cent in the last three months.
A further increase of steel price by Rs 6,000 a tonne is expected by April 1, according to a component industry source. The rising steel prices could not have been more badly timed given that the demand for automobiles has also been on the decline. The overall automobile industry shrunk by 5.3 per cent between April 2007 and February 2008. While sales of passenger vehicles grew by 12 per cent during this period, two wheeler sales fell by 9 per cent and medium and heavy commercial vehicles by 4 per cent
No comments:
Post a Comment