Steel prices continue to rise, and commercial vehicles have the greatest impact on the low profitability of steel.

Since 2010, the prices of raw materials for steel and steel production in the international and domestic markets have risen sharply. Imported iron ore has risen by 50% in the past 12 months, and domestic powder ore prices have increased by 46.44% in 2010. . According to professional sources, in the automobile production process, steel accounts for 60%-70% of the total automobile consumables, and the auto industry is one of the major consumers of steel products. The survey found that due to the profitability of the Chinese sedan industry, the current car prices are There is no plan to increase prices, but in the commercial vehicle industry where the profit margin is relatively low and the steel consumption is relatively large, the impact will be greater.

Commercial vehicles suffer the deepest

In the past year or so, steel prices have remained high at high prices, rising as much as 40%-50%. Whether it is from the domestic or from the international raw material market, Chinese auto companies must face the cost pressure brought about by the long-term high raw material prices.

It is understood that the amount of steel used for bicycles in automobile manufacturing is about 0.8-1 tons, which accounts for 70% of the cost of raw materials; the amount of steel used for medium-sized trucks is about 3.6 tons, which is obviously affected by steel prices; and heavy commercial vehicles are subject to steel prices. The impact will be even greater.

In this regard, a person in charge of Shaanxi Heavy Truck Co., Ltd. said in an interview with the media that for heavy trucks, it is very sensitive to the rise in steel prices. At the end of 2010, the cost per vehicle increased by several thousand yuan. For this price increase, The company will digest itself by lowering costs, increasing efficiency, and then improving management. Yutong bus representatives also said: "The rise in steel prices will certainly have an impact on costs, will relatively take up profit margins, but the company will work through its own efforts to absorb cost pressures and temporarily do not plan to adjust vehicle prices."

Car profit shrinks

Compared to commercial vehicle companies, the days of car companies are much better. It is understood that due to the different market conditions and the continuous rise in the price of steel products, different car manufacturers have different levels of influence. Among them, the profits of luxury cars and mid- to high-end cars are relatively abundant, and the proportion of steel costs is relatively small. At the same time, such companies shift the cost pressure of components as far upstream as possible, and thus the impact is relatively small.

However, under the double pressure of sharp price increases of raw materials and drastic price cuts by cars, the profitability of the Chinese auto industry, which has always been known as “profiteering”, has also been narrowed. Having used a lot of money to make money, Chinese car companies that have spent so much money on their "broad-bones" life have also begun to learn the days of careful planning.

Dongfeng Yueda Kia actively promotes the localization rate of steel used to reduce production costs to ease the impact of the shortage of the international steel market on production. A related person from the Department of Public Relations of Changan Ford also stated that because Changan Ford signed a long-term purchase and sales agreement in cooperation with steel manufacturers and can purchase steel products at a relatively stable price, the current guarantee of normal production is not a problem. More than 70% of the steel used by Japanese automakers depends on domestic steel companies, such as Baosteel, Wuhan Iron and Steel, and Anshan Iron and Steel. Since they have established long-term relationships with these three companies, they can now ensure smooth supply of raw materials for steel production.

Low-end cars are squeezed

Smaller car makers are less fortunate. Due to the limited production and sales volume and incomplete supply chain, the shortage of steel raw materials may directly affect the production of the company. Moreover, due to the high cost of steel and the difficulty of upstream transfer of parts and components costs, low-end car manufacturers are relatively affected. For example, Jiangnan Alto sells for only 18,800 yuan, Geely Panda sells for only 39,800 yuan, and the profit margins for Hafei and Chery cars are relatively small, and raw material price increases will have a greater impact on their profits.

However, for the moment, there has been no increase in the price of auto raw materials, which has caused prices to escalate to consumers. On the contrary, many car manufacturers raised their price cuts, drastically reduced the price of economical cars, and made the competition more fierce. According to analysis, the rise in steel prices will further exacerbate the survival of the fittest of the automotive industry and accelerate the integration of resources in the automotive industry.

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