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09/25/2010

Study: Cars Getting More Expensive

Caused by increasing raw material prices

German consumers have to get used to higher prices for new cars in the medium range. That's at least the opinion presented by most German automotive suppliers. Their reason, just like that of many car manufacturers, is that increased raw material prices on world markets are responsible for it.

Thus, 87 percent of the companies in Germany's supplier industry expect increasing raw material prices in coming years. Almost as many of them, i.e. 86 percent, expect that manufacturers, in turn, will pass on to car buyers any purchase price increases for supplied components. These are the results of a joint inquiry of 100 purchasing executives at automotive supplier companies, published by the University of St. Gallen, the Allensbach Institut (Institute for Public Opinion Polls and Research in Allensbach) and the trade journal "Automobilwoche".

Before this backdrop, knowledgeable industry observers are of the opinion that more early warning systems must be established which will detect, in good time, any concentration of excessive market power on the vendors' part. Moreover, purchasing processes would have to be further optimized.

"Automotive suppliers must be careful not to jeopardize, in the long run, their negotiation position versus vendors", warns, for instance, Gerd Kerkhoff, managing director of the consultancy Kerkhoff Consulting. But that could only be realized "if purchasing managers were already sitting at the table during the product planning stage. This is exactly where many suppliers still waste great potentials in possibilities to influence pricing", says the expert.