CHENNAI: Raw material prices are beginning to soften after nearly 20 months of rising relentlessly. This has allowed auto companies, both vehicle makers as well as component manufacturers, to plan for better margins in the coming quarters. Prices of key materials like steel and aluminium are down and the trend will continue, say auto analysts.
India Ratings & Research associate director Shruti Saboo said, "The cost of raw materials account for 65-70% of the total revenue. The prices of key metals used in the manufacturing of vehicles - including steel and aluminium - has seen a downward trend starting Q1FY23. The average steel prices over June-July have already dropped by more than 9% compared to Q4FY22 average, while the prices of aluminium have declined by over 15%."
