Consumers will need to brace for costlier appliances in the New Year. With inflationary pressures of various commodities continuing to impact durable makers’ costs, several companies are gearing up for another round of price hike to the tune of 5-10 per cent, depending on the categories, either in January or during the fourth quarter of this fiscal year.

Deepak Bansal, Vice-President-Home Appliances, LG Electronics India, said, “There has been a continuous increase in raw material and logistics costs. We tried to absorb costs with innovation activities but some price increase has to be done for business sustainability. We expect prices to increase by 5-8 per cent.”

Omicron threat

Companies have been battling challenges of steep hikes in costs of key raw materials of copper, steel, aluminium, and plastics besides higher components and freight costs through the calendar year of 2021.

Most players have had to take at least 2-3 rounds of price hikes so far including post the festival period in December. The latest round of price hikes comes at a trickier time as the country braces for the third pandemic wave with rising Omicron cases.

Eric Braganza, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA), said, “Market indications are that in January, most players are expected to increase prices by about 5-7 per cent on appliances such as refrigerators, washing machines and deep freezers. December has been a dull month with sluggish demand. It remains to be seen how demand will pan out in the fourth quarter of the fiscal year given the Covid-induced restrictions.”

Air-conditioner players said, besides commodities’ price rise, anti-dumping duties imposed on refrigerants and aluminium have also added to their cost burden.

Spike in input costs

Gurmeet Singh, Chairman and Managing Director, Johnson Controls-Hitachi Air Conditioning India Ltd, said, “Increase in input costs – raw material prices and transportation fares – are pushing brands to increase prices of air conditioners. In a phased manner, up to April, prices will go up by at least 8-10 per cent.”

He added that anti-dumping duties on aluminium and refrigerants will increase costs for AC companies by 2-3 per cent, which is over and above the actual commodity costs increase.

While some companies are expected to take a price hike in January, others will be looking at staggered increases through the January-March period.

Avneet Singh Marwah, Director and CEO, Super Plastronics Pvt Ltd, said, “We will be increasing prices by about 7-10 per cent for our washing machines and coolers portfolio due to soaring raw material costs. We are also looking at taking about a 5 per cent price hike on our LED TV portfolio in February due to the impact of chip shortages.”

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