Holmqvist: High prices are hurting supplier profits.
The world's No. 2 supplier says the cost of steel will significantly raise its internal costs next year -- in the three-digit-million euro range.
"We definitely expect a share of this cost to be absorbed by the OEMs," said Bernd Bohr, Bosch's automotive chief.
How will Bosch get what it wants?
"I wouldn't like to go into detail," Bohr said. "It will be part of the negotiations."
As steelmakers pass along higher costs of raw materials, suppliers buying steel say they can't absorb the costs alone.
French supplier Valeo is doing a "little of everything" to compensate, said spokeswoman Kate Philipps.
"We're trying to negotiate with suppliers of raw materials, negotiate with customers, offset productivities elsewhere," she said.
To help lower its costs, Bosch may redesign some parts.
"We will look into some areas where we can use less steel, but we don't see a large influence here -- maybe on things like brake calipers," said Bohr.
The steel content in European passenger vehicles ranges from E500 in a small car to E1,000 in a premium car, says Italian investment bank Banca IMI.
Meanwhile, automakers are trying to avoid paying more.
Audi is paying some suppliers more as it negotiates new contracts, said Audi spokesman Jürgen De Graeve. More often, the automaker uses its buying power to help suppliers buy cheaper steel.
"We have more resources and contacts than smaller companies," De Graeve said.
Several other automakers declined to comment on their negotiations, but acknowledged that using less steel is not an immediate option.
"On a short-term basis, we can't react because all parts of a car have a certain function, a certain rigidity, and all this has to work together," De Graeve said.
Steelmakers including Arcelor of Luxembourg and Germany's ThyssenKrupp Stahl say they are raising prices as new contracts are negotiated.
Arcelor says prices of the raw materials used to make steel have skyrocketed over the past year. The scrap steel price doubled and iron ore jumped 20 percent. Coke now costs 2.5 times more than a year ago. Arcelor is also raising freight charges to cover rising oil prices.
Individual prices vary, but in general suppliers are paying 25 percent to 50 percent more than a year ago, says CLEPA, the European association of automotive suppliers.
No European supplier that buys steel has gone bust yet, said Lars Holmqvist, CEO of CLEPA. But steel continues to drain supplier profitability, he said.
He said, "OEMs are acting quickly when faced with a bankruptcy situation because it costs more to have bankrupt suppliers."