Surging Gold Prices Drive Up Auto Manufacturing Costs, Posing New Supply Chain and Pricing Challenges

International gold prices have continued to rise recently, with spot gold surpassing $5,500 per ounce on January 29. Although gold is not a primary raw material in automobile manufacturing, its sharp price surge has driven up the costs of key metals such as copper, aluminum, palladium, rhodium, and lithium—directly increasing production costs for vehicle bodies, electrical systems, catalytic converters, and batteries. Automakers now face a dilemma: absorbing these higher costs themselves would squeeze profit margins, while passing them on to consumers could undermine market competitiveness. Meanwhile, cost volatility among parts suppliers has intensified, making supply chain management more challenging. To cope with this pressure, some automakers are adopting lightweight designs to reduce metal consumption, optimizing product configurations and after-sales services to enhance value-added offerings, or even exploring the inclusion of gold in their asset portfolios as a hedge against risk. Industry experts anticipate that high gold prices may persist, urging the automotive sector to accelerate technological innovation and strategic adjustments to turn this challenge into an opportunity for transformation.