|
Audi's chief executive has warned that it - and other carmakers - might need to increase vehicle prices above inflation in response to soaring raw material and technological costs.
In an interview with the Financial Times, Rupert Stadler said that the Volks-wagen-owned luxury brand "would be prepared" to raise its prices next year if current cost trends continued, and depending on what its competitors did.
"If prices remain on this high level, the pressure for sure is increasing for everybody," he said.
The price of steel has roughly doubled this year, adding to carmakers' rising cost burdens arising from investment in cleaner engines and smaller vehicles, and exchange rate-related losses on overseas markets.
Most carmakers are hedged for these risks but they will face bigger pressures on their margins next year when hedging opportunities are expected to be less attractive, Audi's boss said. "The real burden is not to be seen in 2008," Stadler said. "The big question is what is coming in 2009."
Audi raised prices for some of its cars by between 0.5 per cent and 1.5 per cent earlier this year. BMW raised its prices in the US, its largest market, by less than one per cent earlier this month.
Stadler said it would be "premature" to talk about the scale of price rises that Audi and other carmakers might need to make.
The pressure from rising costs is more intense for mass-market carmakers, which operate on thinner margins than luxury brands.
"If the industry is taking these head winds seriously, they will have to raise prices by five to 10 per cent," said Arndt Elling-horst, head of European automotive research with Credit Suisse. "But it could cost them 10 to 20 per cent of their volumes, and then we're talking about under-utilised capacity."
|
