CAR maker Nissan may be forced to increase the cost of new vehicles following a rise in steel prices and energy costs.

Leading car manufacturers, including Nissan, say they may be forced to increase prices in response to a 20 per cent rise in the cost of steel, due to be imposed by Anglo-Dutch steelmaker Corus this month.

Corus said the rise was caused by higher prices for iron ore and coal, which have risen in the face of increased demand from the Chinese steel industry.

It warned that raw material prices were expected to rise by a similar amount this year.

A spokeswoman for the steel group said: "We will renegotiate our contract prices next year, but we cannot comment on them."

Car makers are reportedly having to pay a share of an estimated £1.8bn in extra energy costs facing industry this year from continued high power prices and the emissions trading scheme.

Nissan, which makes the Primera, Almera and Micra in Sunderland, said its new car prices had remained about the same for at least three years.

A spokesman said the company wanted to be able to absorb the higher raw material costs and maintain current pricing levels.

But he said the new car market was very competitive and the company may have to adjust car price incentives if competitors raise their prices and it is unable to continue to carry the higher costs.

"We are observing our rivals and hoping we will not have to do that," he said.

Honda, which employs 4,000 people making its Civic and CRV 4x4 models at its factory in Swindon, said the prices of its cars during recent years had remained fairly static.

A spokesman said the group had no plans to increase its prices as a result of the Corus rises and was absorbing higher raw material costs.

Toyota, which has its main UK plant near Derby, said the Corus steel price rise would have a minimal affect because the Japanese company receives less than ten per cent of its steel from Corus.

A spokesman said it was in negotiations with other steel suppliers about prices, but declined to comment on how rises would affect the cost of its cars.

A typical car may use more than 770kg of steel.

Corus supplies about 40 per cent of its steel on long-term contracts to carmakers and other customers and 50 per cent on a so-called spot, or one-off, basis.

It said at the time of its interim results last year that it expected to increase its contract prices by 20 per cent this month.

The Corus spokeswoman said the rise was intended to keep pace with its spot steel prices, which it increased in every quarter last year.