TROY, Mich. (July 29, 2004) — Rising steel prices are raising concerns over costs for several automotive and commercial vehicle suppliers, says ArvinMeritor.

ArvinMeritor this weak reported record fiscal third-quarter sales of $2.4 billion, and net income of $ 53 million — mainly due to a surging demand in commercial trucks. However, it also announced that raw material costs jumped approximately $18 million, after taxes, in the same quarter. That trend may affect fourth quarter results, the company said.

Most of ArvinMeritor’s steel exposure is in its commercial vehicle systems unit — which makes components like transmissions, brakes, and drivelines. Sales in the commercial unit were $862 million, up 34 per cent from a year ago.

The company said it has more leverage to improve what it pays for steel in its commercial vehicle unit than in its light vehicle unit. The auto makers have been pressed to cut costs wherever possible, and have been reluctant to take on any additional costs from their suppliers.

— from Dow Jones Newswire