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Consumer durable makers are all set to hike prices in the range of 2-5 per cent due to the strengthening of the US dollar and the hike in raw material prices because of rising crude oil prices.
The price hike will add to the woes of the industry, which has already been witnessing sluggish demand. For instance, despite the rising temperatures, cooling products such as air-conditioners have not reported a big jump in sales.
While most companies said prices will be increased effective June 1, some have already done so. Kamal Nandi, Business Head and EVP, Godrej Appliances, said: “Strengthening of the US dollar is putting pressure on inputs costs; rising commodity prices, specifically steel and crude oil, are rising. The price hike will come into effect in June as we don’t want to disrupt sales in the ongoing summer season. Also, the increase will come into effect when there will be orders for new inventory, as the products for the summer season were manufactured before the season commenced.”
Eric Braganza, President, Haier Appliances India, said: “On refrigerators, we increased prices by 2 per cent earlier this week. We are monitoring the price trends and will take a call on other categories. In the appliance segment, the industry is expected to raise prices in the range of 3-5 per cent effective June.”
Sluggish demand
Since last year, the consumer durables industry has been urging the government to reduce the GST rate of 28 per cent on white goods to provide a boost for the sector. At the same time, intermittent rain across the country has hit the demand for air-conditioners. Players also pointed out that the new energy efficiency labelling norm, which came into effect from January 1, has made ACs less affordable, and this has also adversely impacted offtake
In the TV segment, too, manufacturers could raise prices by 3-4 per cent.
Avneet Singh Marwah, Director, Super Plastronics, brand licensing partner for Kodak TVs in India, said: “Nearly 70 per cent of the cost of a TV set is taken up by panels, which are imported. Hence, with the strengthening of the dollar, we will need to hike prices 3-4 per cent from June.”
Ajay Seth, Head, Channel Operations, Panasonic India, added that the cascading impact of rising crude oil prices and the continual depreciation of rupee will impact the economics of the consumer-durable industry.
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