Justifying the rise in prices for cars by the rise in prices for steel, automakers are simply shifting the blame, according to Severstal. Machine prices rise as steel prices fall, the company said.
Photo: Egor Aleev / TASS
Car manufacturers’ statements that the rise in prices for cars is caused by the rise in steel prices look unfounded, if not “sly”. This was announced to RBC by a representative of the mining and metallurgical company Severstal.
The main arguments of the metallurgists are as follows:
- the share of steel in the cost of a car is on average 5%, and the impact of rising prices for steel is incommensurable with the rise in prices for automotive products in the last year;
- automakers practically do not feel price fluctuations in the steel market: they cooperate with steel suppliers on the basis of long-term contracts that provide for formula prices with smoothing coefficients, or fixed prices for the entire duration of the contract;
- even spot prices for steel began to decline from July, they “were corrected during the entire period of August-November.”
“One gets the impression that colleagues are trying to shift the problems of their own industry – a shortage of microchips, a significant increase in prices for other, often more significant in the cost structure, components and materials, etc. – on metallurgists, as well as to strengthen their negotiating position on the eve of the season “, – said the representative of Severstal.
At the end of the first half of 2021, three Russian metallurgical companies – Viktor Rashnikov’s MMK, Vladimir Lisin’s NLMK group and Aleksey Mordashov’s Severstal – reported an almost threefold increase in pre-tax profit due to an increase in prices for steel products. Their profitability reached a record 40–55%.
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