The cost of super minis in China is expected to rise by 1000rmb to 3000rmb over the next coming weeks as the price of steel hits all time highs. Certain car markers, such as Chery, have already risen their prices on best selling models, and Changan automobiles (Suzuki Joint venture partner) has just raised prices by upto 2000rmb on certain models.
The cost of rising metal has not affected mid size sedans as of yet, as the profit margins on larger vehicles is naturally much higher than small vehicles, where a ‘pile them high, sell them cheap’ philosophy is largely employed.
Chery and Chang’an have raised their prices, who will be next? Great Wall have denied that they will raise their prices by 500rmb, but we think they may eventually cave in.
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