To increase or not to increase prices has been the most frequently asked question by marketing managers of auto manufacturers in China recently.

Auto consumers worry that soaring iron and steel prices may have a huge impact on raw material costs in the auto industry and in turn have a knock-on-affect on the price of the end product.

Baosteel said on Monday it agreed with Australian mining group Rio Tinto on a price increase of up to 96.5 percent for iron ore in 2008, nearly double that of 2007.