New Delhi: Automobile manufacturers are facing cost pressures that are expected to impact their margins and slow down demand in the coming quarters. Prices of key raw materials, including steel, metals, and plastics, have risen sharply since March, according to the latest data from the Society of Indian Automobile Manufacturers (SIAM).
Steel and Metal Prices Surge
Due to the war in West Asia, steel prices, a critical input for vehicles, increased around 10% year-on-year to approximately Rs 60,000 per tonne in March 2026. Stainless steel costs have risen 16% to above Rs 2 lakh per tonne, pushing up the cost of body and structural components. The pressure was further intensified by a 31% surge in coking coal prices, a key raw material used in steel production.
Non-Ferrous Metals Also Rise
Non-ferrous metals recorded strong gains, with aluminium and copper rising 27% and 28%, respectively. In the plastics segment, widely used in interiors and components, price increases were even sharper. Thermoplastics like polypropylene rose up to 34% to Rs 136.2 per kg in March 2026 from Rs 102 a year ago, while polycarbonate was up 9% at Rs 227 per kg in the same period, the industry body said in a report.
Precious Metal Spikes Hit Emission Systems
Precious metals used in emission control systems saw steep spikes in March. Platinum rose 124% to Rs 6,196 per gram, rhodium surged 121% to over Rs 33,000 per gram, and palladium increased 74% to Rs 4,712 per gram, raising the cost of essential emission control devices in cars.
Impact on Demand and Margins
Experts said the broad-based rise would not affect demand in the near term, but prolonged stress would slow purchases across segments. "Rising costs for metals, polymers, and precious metals are squeezing carmakers. Coupled with a weakening rupee, these pressures will force price hikes to protect margins," said Gaurav Vangaal of S&P Global Mobility.
Industry players said the impact is being felt across the value chain, with steel alone accounting for 50% to 60% of vehicle input costs. "The pressure is very real," an executive said.
