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Carmakers Face Supply Price Hikes

Ford isn’t alone in facing cost increases as manufacturers continue to deal with supply shortages.

September 22, 2022
Carmakers Face Supply Price Hikes

Suppliers told Reuters they’re passing on the cost of rising material, labor and energy prices by 7% to 20%.

IMAGE: Getty Images/studio-fi

1 min to read


Suppliers are indeed charging automakers more for parts, Reuters found when it surveyed several parts makers after Ford said this week it’s experiencing a $1 billion increase in costs.

The suppliers told the news agency that they’re passing on the cost of rising material, labor and energy prices by 7% to 20%.

Ford warned investors on Monday that it would absorb $1 billion in extra costs in the third quarter, thanks for inflation and supply chain problems. The announcement sent its stock into a nosedive for its worst day in more than a decade. Ford said it plans to restructure its supply chain as a result of the unexpected cost hit.

The price increases come as carmakers continue to grapple with supply shortages, including of microchips for electric-vehicle batteries, that have slowed production and squeezed dealers’ inventories.

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