Nippon Steel Corp., one of the largest steel producers in the world, has announced that it could soon raise the price of steel, a move that can add to the inflationary pressure on the car industry.
“Otherwise our profits will be squeezed,” Mori said. “The biggest concern is the domestic construction sector,” he said. As Nippon Steel cannot shoulder the entire cost, “all we need is to win understanding from those customers through discussions.”
Sheet metal makes up around 5 to 22 percent of a vehicle’s total cost. As such, any increase in steel prices will inevitably add to the cost of car production and would get passed on to end customers.
The average new vehicle price in May is expected to hit a record of $44,832, which is a 15.7 percent increase from a year back.
“For the balance of 2022, increased vehicle availability, higher interest rates, and some cooling of used-vehicle values likely will lead to slower transaction price growth—but are unlikely to lead to declines,” he said.
According to J.D. Power, new-vehicle retail sales in May are expected to register a 20.9 percent year-over-year decline. “For the 12th consecutive month, month-ending retail inventory will be below one million vehicles,” King said.
“The industry sales pace is being dictated by how many units are delivered to retailers during the month, and demand far exceeds supply. Record transaction prices are the result.”