Rising steel, freight and fuel costs squeeze Indian auto makers, prompting further price hikes

In September, hot-rolled steel costs rose roughly 30% year-on-year, reaching a 12-month peak of Rs 65,000-66,750 per tonne, while cold-rolled steel jumped 28% to Rs 71,125-73,375 per tonne. Aluminium prices also climbed 23% to $3,276.80 per tonne, affecting a sector that consumes 9% of hot-rolled steel and 21% of aluminium in India. Freight rates have surged amid global uncertainties, and CNG prices in Delhi rose 13% over the previous year and 4% month-on-month, with Mumbai seeing similar increases.

Leading manufacturers—including Maruti Suzuki, Hyundai Motor India, Tata Motors, Toyota Kirloskar Motor and Mercedes Benz India—have already implemented two to three rounds of price adjustments this year and are monitoring input costs closely, warning that further hikes could follow the festive period. Executives from Maruti Suzuki and TKM emphasized the volatility of raw-material prices and the need for value engineering, while Mercedes Benz India noted that foreign-exchange pressures also contributed to its modest price hikes. Auto sales have posted strong double-digit growth in the first half of the fiscal year, but analysts expect the pace to moderate to 5-6% between October and March FY27, with total sales projected to rise about 10% to over 4.64 million units.