Setting new car pricing is just about to become more complex, according to French importer, Renault. At the launch of the marque's new Laguna model (more here), the company's Australian MD, Rudi Koenig, and Director of Marketing, Christophe Di-Perna, announced that the price of steel would rise by 40 per cent before the end of the year.

Booming 'supermarket' economies -- India, China, Russia -- are demanding so much mineral resource to feed the march towards prosperity, the demand is driving up prices all around the globe.

Since our own mining companies are supplying those same economies, the local automotive industry probably won't get off lightly any more than manufacturers in Europe, Asia and the USA.

Car companies are already taking whatever action necessary to keep material costs low or reduce the impact of higher prices on vehicle production costs.

One importer has already raised the price of a previously sub-$20,000 car above that benchmark in anticipation of the increased cost of goods sold, according to Di-Perna.

There are various means of mitigating the effects, according to the Renault execs. Those include shifting production to a plant in a country with a favourable exchange rate or lower labour costs. Some companies will doubtless be timing their new car shipments and negotiations with the factory to coincide with prospective legislative changes.

"The other issue is going to be what happens to duty rates on passenger cars next year, whether the ten per cent to five per cent reduction actually occurs -- with the Bracks inquiry," says Koenig.

"The jury's out, but there's probably going to be a reduction -- but not the full five per cent in one hit."

Another way of tackling this issue may reside within the purview of retailers and consumers.

"There's also the issue; what companies decide to do on marketing," asks Koenig.

"One way to do it is to reduce your marketing spend. You don't offer the $2000 value-added [models]. Most people walk in and want a further discount [on those]. So those things disappear. Instead of putting the prices up, [the consumer doesn't] get the discount."

But David McCarthy, Senior Manager Corporate Communications at Mercedes-Benz believes that while the increased cost will have an impact, it probably won't be felt immediately and even once the prices start to rise, they'll be more gradual than a 40 per cent spike might suggest.

"[Steel price rises don't] always translate to the extent you think that increase will, because you've got forward purchasing [and] you've got hedging."

"It will have an impact -- in terms of what sort of an impact, we don't know yet. It's a big component in the price of a car, but it's not the biggest component. There are all sorts of other components -- labour, shipping and taxes--  in the price of a car.

"Most, if not all car manufacturers have forward contracts for steel, at set prices. That doesn't go on forever -- and it's not usually for all the steel you use, either. It might be for 80 per cent, it might be for 50 per cent. It really depends, but it also has an impact on [parts] suppliers as well, because they have similar arrangements.

"But theirs may be shorter, they may be longer, they may not be as advantageous -- so there's a lot of factors [where] 40 per cent doesn't translate immediately."

"Contracts are complex, because they only allow a certain amount of the increase to be passed on -- and you don't have the option of saying 'we won't buy your steel', because there's not a lot of steel companies in the world.

"There's certainly the potential for increase there. There's no doubt about that," says McCarthy, who nonetheless remains mostly unperturbed about global steel prices.

But does this mark the end of the cheap car era for the average consumer?

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