AUTOSHOW-Commodities price volatility challenges auto industry

* Price-setting hampered by volatility - industry expert

* Opel banks on improved productivity to offset costs

* Nissan tries to reduce depence on scarce metals

* Raw material prices reached peak - Daimler CEO

FRANKFURT, Sept 14 (Reuters) - It's not the rising cost of commodities but rather the volatility of prices that is giving auto makers a headache, global auto executives and analysts say.

"You can't decide on a price increase if the prices are constantly moving," Hubertus Bardt, an expert on the impact of commodities prices on industry at the Cologne Institute of Economic Research, told Reuters on Wednesday.

According to the institute, the price of industrial metals has risen by more than 300 percent since 1999, forcing auto makers to focus on more efficient production methods.

For value brands, it will force a greater focus on efficiency, Nick Reilly, Chief Executive of General Motors' European arm Opel, said.

"You can't always recover the raw material costs and so it's constantly a battle of improving our productivity, improving different things in the car to offset it. So it's not just a matter of putting our prices up," Reilly told Reuters Insider TV in an interview.

China's demand for commodity imports, including crude oil, copper and iron ore is adding to margin pressure for global auto makers.

Andy Palmer, executive vice president at Japanese carmaker Nissan said: "Commodity prices are more about volatility. One minute it's skyrocketing, the next it's not. It's quite difficult to know what to do."

In response, Nissan is trying to reduce its dependence on scarce metals through engineering.

"Catalytic converters are a great story. The way that you wash the honeycomb brick and significantly reduce the amount of material you apply was far more significant than hedging," Palmer said.

Automakers were already forced to invest in improving the fuel-efficiency of their cars after the price of oil rose by more than 700 percent since 1999, the Cologne Institute's Bardt said.

German premium carmakers Daimler (DAIGn.DE) and BMW both said increases in the price of commodities are still manageable.

"We have experience with this because in the last few years again, that volatility in the raw material market has been very, very stark," BMW board member Ian Robertson told Reuters Insider TV.

"Will it affect the pricing of our models? We'll have to wait and see. But overall, it's a relatively small impact in the overall cost base of the company," he said.

Daimler Chief Executive Dieter Zetsche said higher commodity prices are still accompanied by stronger demand for cars in growing economies.

"You are not hit by both a recession and growth in commodity prices at the same time," he said.

He also said he does not see any short-term spike in raw material prices.

"I think we have seen the peak (of raw material prices), and this has been part of our costs and thereby priced in already. So going forward I do not see a threat from that side." (Reporting By Edward Taylor, Helen Massy Beresford, and Darcy Lambton; Editing by Mike Nesbit)