Despite increasing efforts to cut costs as raw materials prices rise, Volkswagen still expects to feel the pinch.
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“From today’s perspective the impact resulting from (cost-cutting) will not compensate for current market prices,” a spokesman told Reuters.
The news agency said the comments came as investors offloaded European car sector shares in the face of concerns over raw material prices and the outlook for the US economy, plus the euro’s strength against the dollar.
The report added that, though car makers typically lock in steel prices via long-term contracts, they eventually have to face price increases as these contracts are renewed.
BMW said recently it expects raw materials costs to rise 12% this year, Reuters added.
