Poll: Honda most often eases auto suppliers' material costs

David Sedgwick
AUTOMOTIVE NEWS

Published: June 10, 2013 12:25 pm ET
Updated: June 10, 2013 12:27 pm ET

Related to this story

Topics Automotive Resin Pricing
Companies & Associations Honda Motor Co. Ltd.

If you're a supplier and you're worried about fluctuating costs of your raw materials, Honda, Ford, Toyota and Nissan are the best customers to deal with.

According to a survey of 88 suppliers published last week by IRN Inc., Honda Motor Co. is most likely to offset raw material price increases.

Hyundai Motor Co. is considered least likely to do so, followed by General Motors.

The survey also concludes that raw material prices are likely to be pretty stable over the next 12 months.

Price increases for aluminum and plastic resin are expected to range up to 10 percent, while copper and steel prices are likely to remain stable.

But rubber prices could spike, IRN predicts. "The one area where material price escalation is still a major issue is rubber," said IRN principal Kim Korth in her summary.

"It has been this way for a few years and is likely to remain so," she added.

Overall, the report is good news for suppliers. Despite rising auto production in North America — and fear of bottlenecks among some suppliers — the survey suggests that most raw material prices will be stable.

That's a big change from 2007, when soaring steel prices caused panic among manufacturers, who got price relief only when auto sales crashed in 2008.

Since then, suppliers have pressed automakers to index the price of raw materials, which adjusts the price of parts to reflect fluctuating materials costs.

Suppliers are making progress, but some automakers are more generous than others.

Honda Motor Co., Ford Motor Co., Toyota Motor Corp. and Nissan Motor Co. got good grades for their willingness to index raw material costs.

For example, 79 percent of suppliers said Honda was more likely or somewhat likely to offset price increases in a satisfactory manner while only 16 percent said it was least likely or somewhat unlikely to do so.

But only 9 percent of suppliers said Hyundai was more likely or somewhat likely to offset price increases while 45 percent said the South Korean automaker was least likely or somewhat unlikely to do so.

Overall, the report suggests that executives won't stay awake at night obsessing over steel prices — at least, not right now.

"For the last several years, the fear of material price inflation is starting to feel like yesterday's news," Korth wrote in her summary.

She added: "We agree that the short-term outlook is positive, but we remain convinced this is a temporary phenomenon."


Comments

Poll: Honda most often eases auto suppliers' material costs

David Sedgwick
AUTOMOTIVE NEWS

Published: June 10, 2013 12:25 pm ET
Updated: June 10, 2013 12:27 pm ET

Post Your Comments


Back to story


More stories

Image

Haitian builds system for Renault's new China auto assembly plant

April 24, 2015 11:10 am ET

A late-comer to the world's largest auto market, French carmaker Renault SA is currently building its first factory in China.    More

Image

Eriks NV buys two US polymer companies

April 24, 2015 10:38 am ET

Dutch company Eriks NV is expanding its reach in the North American plastics sector with two acquisitions: Dallas-based Seals and Packings Inc. and...    More

Image

Jeco adds Ferry rotational molder to handle increase in business

April 23, 2015 12:27 pm ET

Jeco Plastics Products LLC is ramping up for more work, adding a new Ferry 2600 rotational molder that will provide more capabilities.    More

Image

Engel, VW working on joint research into high volume composites in auto

April 23, 2015 9:40 am ET

Engel, the Austria-based manufacturer of injection molding machines, is building one of its largest machines for a research center looking into...    More

Image

Federal-Mogul building auto wiper blade plant in Romania

April 22, 2015 12:28 pm ET

U.S. car parts maker Federal-Mogul Holdings Corp. has unveiled plans to establish a new production facility in Ploiesti, Romania, reports local news m...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events