Tight supply of auto parts suppliers faces cost pressure

In the first quarter, the auto market was surprisingly quiet. The "price war at the beginning of the year" was replaced by "dark price increases." Car dealers are facing severe cost pressures. According to industry sources, at present, 98% of the raw materials used in domestically produced engines are steel. Because the price of iron ore has been rising all the way, the procurement costs of engine companies have been significantly affected.

In the first quarter, the auto market was surprisingly quiet. The "price war at the beginning of the year" was replaced by "dark price increases." Car dealers are facing severe cost pressures. According to reports, due to the impact of rising raw material prices, domestic mainstream automobile engine manufacturers are interested in increasing their ex-factory prices in the near future. The gross profit margin of vehicle manufacturers may therefore be reduced. Car dealers are using various methods to reduce costs and maintain profits. The car prices are in a delicate balance.

Engine prices are expected to rise

Affected by the increase in raw material prices, a considerable part of the engine manufacturers have plans to increase prices. "Rising raw material prices have brought pressure to the engine companies," said industry insiders in the commercial vehicle industry. According to Liu Tie Zhuang, deputy general manager of Dalian Diesel Engine Sales Co., Ltd. of FAW Jiefang Automobile Co., Ltd., the price of Dachai’s engine products may increase by an average of 10%-15%. The relevant person of Dongfeng Chaoyang Diesel Engine Co., Ltd. stated that the price increase is a chain reaction and that the cost of the engine product can also rise after the purchase cost increases. From the perspective of the increase in the price of raw materials, the price of the engine must rise at least 10% to offset the impact of the price increase of raw materials on engine companies.

According to industry sources, at present, 98% of the raw materials used in domestically produced engines are steel. Because the price of iron ore has been rising all the way, the procurement costs of engine companies have been significantly affected.

Vehicle manufacturers may lose profits

The price of auto parts may affect the level of gross margin of automobile manufacturers in the second quarter. Although the profits of bicycles in the automotive industry rose slightly in the first quarter, the supply of spare parts suddenly became tense as the inventory of raw materials decreased and the quarterly supply prices were adjusted. This not only strengthens the expectation of further increase in automobile manufacturing costs, but also exerts greater pressure on the capital mobility of automobile manufacturers.

Just in the past March, no one mainstream carmaker voluntarily announced price cuts, and some auto makers have begun to quietly respond to the impact of rising raw materials prices such as steel, and the “dark drop” in vehicle prices has been replaced by “dark rise”. In the first quarter of this year, car dealers or promotional discounts have shrunk, or new cars have been priced too high, or they have reduced allocations or increased sales. Some of the car dealers' tens of millions of cash discounts have been replaced by gifts worth "ten thousand yuan." The shrinkage of some vehicle configurations has repeatedly appeared. Some models have not changed their prices, but they have lost a lot of things, such as engine guards, compartments, etc., or they have changed the dual-stage airbags into single-stage airbags, replacing brand-name tires with ordinary tires. and many more.

According to relevant monitoring data from the National Development and Reform Commission, domestic auto prices in March rose by 0.15% from February, and the price of passenger cars increased from 0.18% in February to 0.27% in February.

OEM For Drawing

JTY Titanium can process Titanium Product according to customers' drawings. If no drawings are available, JTY can also design drawings and execute production based on requirements.

Service: CNC Machining,Turning and Milling, CNC Turning, OEM Parts

Material :Titanium GR1,GR2,GR5, GR7,GR12etc

Main Equipment : CNC Machining center(Milling), CNC Lathe, Grinding machine,

Cylindrical grinder machine, Drilling machine, Laser Cutting Machine,etc.

Drawing: format STEP,STP,GIS,CAD,PDF,DWG,DXF etc or samples.

Tolerance: +/-0.01mm ~ +/-0.05mm

Surface Roughness: Ra 0.1~3.2

Inspection:

Complete inspection lab with Micrometer, Optical Comparator, Caliper Vernier,CMM

Depth Caliper Vernier, Universal Protractor, Clock Gauge, Internal Centigrade Gauge

Capacity:

CNC turning work range: φ0.5mm-φ150mm*300mm

CNC milling work range: 510mm*1020mm*500mm

Oem For Drawing,Oem&Odm Titanium Maching Parts,Titanium Tubes Forged As Per Drawings,High Strength Titanium Parts

Baoji Jintaoyue New Material Technology Co.,Ltd , https://www.jtytitanium.com