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The consumer durables industry expects dealers to start taking fresh stocks only after a fortnight of GST rollout. The dealers who have been offering huge discounts to clear the stocks till June 30 may take a few days to put their internal systems in place.
From July 1, the prices of durables which have been placed in the 28 per cent tax rate are likely to see a hike in the range of 2-5 per cent.
Replenishing stocksKamal Nandi, Business Head and EVP, Godrej Appliances, said: “Dealers who have been pushing secondary sales will now look at replenishing their stocks. But, we believe it could take a few weeks for primary sales to completely stabilise as dealers and distributors get used to the new tax structure.”
Dealers had been doling out hefty discounts in June on consumer durables, in a bid to de-stock. They had also drastically cut down on fresh purchases, which had led to a big drop in primary sales in the consumer durables industry.
Manish Sharma, President & CEO, Panasonic India, said: “Further to the official rollout of GST, we are expecting the primary sales to retailers from companies to pick up from the second week of July. We expect revision in prices of select consumer durables category.”
A senior executive with a consumer durable retail chain said that while the company is prepared for the GST transition, it expects new stocks to start filling up the shelves only in the next four-five days and not immediately.
CM Singh, COO, Videocon, added: “June saw a huge uptick in demand just as one sees in the peak festive season due to discounts and sales schemes being run by dealers and retailers.
“So, dealers and retailers had already started replenishing certain models that had been sold out. However, we believe it will take a few days for primary sales to get completely normalised.”
Meanwhile, commenting on prices, Nandi added: “We expect the market operating prices of home appliances that have been placed in the 28 per cent GST slab to see a marginal price increase of 1-2 per cent in the near term, which we believe will get corrected in the long term.”
Price correctionEric Braganza, President, Haier India, said that there is likely to be an upward revision in prices by 2-5 per cent across various categories. He said that the company saw a 40 per cent increase in sales in June.
Certain categories of small appliances are also likely to see some increase in effective prices, indicated Sunil Wadhwa, CEO, Groupe SEB India.
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