Sustainability vs profitability: Auto companies walking a tightrope

Prices of key commodities, including steel, rubber, rhodium and platinum have seen a jump. Passing on the full cost increase may not be prudent as it may dissuade buyers

Amid a steep increase in input costs, auto firms will have to walk the tightrope and strike the right balance between demand sustainability and profitability. 

While a price increase in the first month of the calendar year is a yearly phenomenon, what makes the current year different is the quantum of jump that prices of key commodities, including steel, rubber, rhodium and platinum have seen.

It comes at a time when sales have just started turning the corner after a protracted slowdown and recovery in some segments still remains patchy. Passing on the full cost increase, therefore, may not be