The auto and manual both drive the front wheels with an active on demand rear Haldex drive unit, items like the exhaust could be effected however all the parts for the drive, prop shaft etc etc are at the rear or middle of the car so the power steering is not very likely to be related here.
It is worth getting a second opinion as the fitting of a new pipe or some new pipe work should not cost 600. It would sound like there is some additional work required here.
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