It is reported that Tata Motors has decided to absorb a significant portion of the materials cost increases being experienced by suppliers to the Nano.
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The Economic Times reported that the company has agreed to foot the cost difference that has arisen as a result of increased steel prices following intense lobbying by suppliers.
“The vendors had been pushing for some relief for quite a while and Tata Motors has finally relented on the steel front,” the CEO of a Delhi-based auto component company told the newspaper.
The nearly 50-60% increase in steel prices since last year has pinched vendors, particularly forging companies, and most are renegotiating contracts with auto OEMs, the paper noted.
Suppliers in India are also battling the 40% increase in prices of furnace oil, used extensively in the forging process. Forging components comprise roughly 15-20% of the total input cost of a car.
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