No headway in reducing auto parts prices

By admin August 13, 2009 11:40 am IST

Indian auto part suppliers are demanding they be waived from an annual contract to lower prices by a certain fixed amount. As carmakers face financial woes, any reduction in costs is welcome. 
 
The contracts between auto component makers and carmakers usually have a price reduction clause built-in, but this is the first time in several years that an issue has been made over price cuts. “There is not much scope to reduce prices at the moment, unless steel prices go down. This is a fixed cost intensive industry and with volumes going down, our costs are higher,” said Santosh Singhi, Chief Financial Officer at Amtek Auto.