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Richa Mishra

New Delhi , Aug. 30

WILL the last four months of the current year be as `festive' for the consumer durables and electronics industry as it will be for the consumer?

Though in the first eight months of the year the industry overall has experienced expected growth, the regional players have taken a beating, industry insiders reveal.

The year, which started on a high note thanks to World Cup cricket, experienced lack lustre growth after the initial three months euphoria. Besides, polarisation has taken place in the industry with multinational players such as LG and Samsung cutting down their prices, thus narrowing the gap between them and the national brands, industry sources say.

"Even though overall volumes may not have dropped, regional players have been hit. This is not a very healthy trend," a Consumer Electronics & TV Manufacturers' Association (CETMA) official said.

ICRA in its report on `Indian Consumer Durables Industry: Performance Review During FY 2003' has stated, "As in the past few years, the consumer durables sector is likely to witness intense competition in the future. For most players, this might mean a further decline in margins. In such a scenario, reducing prices without being able to achieve a concomitant reduction in costs would not be counted as sound strategy. For domestic players, the pressure on margins is likely to be higher, as they would either have to explore fresh technologies or invest considerably in product research."

Despite this not so happy trend, the industry is still optimistic about meeting the growth target. "The general mood is positive because of the oncoming festive season and the economy looking up. The industry is expecting high sales in the next four months," CETMA official told Business Line.

In fact, the industry is looking at a growth of 15 per cent to 20 per cent in CTV, 15 per cent in air conditioners, 10 per cent in refrigerators, 5 per cent in washing machines and 10 per cent in music systems for the year. The overall growth expected is around 10 per cent to 15 per cent.

"Economy models will continue to be growth drivers. For instance, the semi-automatic category in washing machines, and the direct cool category in refrigerators are the segments that will experience further growth. In case of air conditioners, its reduction in prices that has pushed growth," analysts said.

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