Chery raises car prices, others to follow suit?
Chery has recently raised prices on its cars after the world wide prices for steel and iron ore raised sharply during 2007 and 2008. Around 1000 to 3000rmb has been added to each car to offset the rising costs of base materials, the models most affected are the popular Chery models such as the QQ mini car, and the Tiggo compact SUV.
Previously, Great Wall stated that it would not raise the price of its cars but may well be forced into doing so if the price of steel continues to rise.
Self developed Chinese manufactures may be more at risk from rising steel prices as they rely on wafer thin profit margins to make their cars competitive with the international brands that have come into, and for a large part, control the Chinese automotive market place.
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Well, throw in all the parts required to comply with US and Euro regulations(galvanized high strength steel, ABS, six airbags, California emissions, EuroNCAP crash performance), and Cherys are no longer cheaper than Toyotas.
The only reason Chery models were cheap was that they didn’t come with much.