West Asia conflict: Auto companies feel price pressure

New Delhi: Automobile manufacturers will face cost pressures that is expected to impact their margins and slow down demand in the coming quarters as prices of key raw materials, including steel, metals and plastics , have risen sharply since March, latest data from the Society of Indian Automobile Manufacturers (Siam) showed.

Due to war in West Asia, steel prices, a critical input for vehicles, increased around 10% year-on-year to around Rs 60,000 per tonne in March 2026, while stainless steel cost has increased 16% to above Rs 2 lakh a 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 recorded strong gains, with aluminium and copper rising 27% and 28%, respectively.

In plastics segment, widely used in interiors and components, price increases were even sharper, with thermoplastics like polypropylene rising 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 in March 2026, the industry body said in a report. Precious metals used in emission control systems saw steep spikes in March, with platinum rising 124% to Rs 6,196 per gm, rhodium 121% to over Rs 33,000 per gm and palladium 74% to Rs 4,712 per gm, increasing cost of essential emission control device in cars.



Experts said broad-based rise would not affect demand in 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.

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