The boom in ai infrastructure is pushing up prices of key metals like copper and aluminum, squeezing margins for indian carmakers such as maruti suzuki. This competition for materials used in data centers is contributing to higher vehicle costs. Automakers are facing similar pressures from chip shortages linked to ai demand.
The artificial intelligence revolution is creating unexpected challenges for india's automotive industry through surging commodity prices. Maruti suzuki india, the nation's largest passenger vehicle maker, reported operating profit margins falling to 8.1% of net sales in the third quarter of fiscal year 2026, down from 8.4% the previous quarter. The company linked 60 basis points of this decline to rising costs of platinum group metals, aluminum, and copper.
Rahul bharti, senior executive officer for corporate affairs at maruti suzuki, highlighted the issue: “We are seeing some kind of headwinds in commodities at the moment in platinum, palladium, rhodium and aluminum and copper. And some of these are also being discussed across sectors. Some of these have to do with the ai memory chips etc. also.”
Data centers powering ai require vast amounts of copper for electrical systems and aluminum for cooling, intensifying competition for these materials. On january 29, 2026, aluminum prices in india reached a record rs 361.25 per kg, while copper hit rs 1,480.3 per kg.
Hyundai motor india also announced a price increase across its models from january 1, 2026, citing higher input costs from precious metals and other commodities.
Beyond metals, a ubs report warns of a dynamic random-access memory (dram) chip shortage starting in the second quarter of 2026, as manufacturers prioritize ai servers over automotive needs. This echoes shortages during the covid-19 pandemic.
Surging electricity demand, projected by s&p global to rise nearly 50% globally by 2040 with india at 4.2% annual growth, further fuels copper needs for electrification, including ai infrastructure and electric vehicles.
