Prices of consumer durables to go up | SupportBiz

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Prices of consumer durables to go up

 
If you are planning to buy a refrigerator or an air conditioner, do it soon. Companies are about to raise the prices of consumer durables again to offset the impact of a depreciating rupee and rising input costs. Industry sources say the price increase this time would be between four to 10 percent. Most of the firms had hiked prices post-budget.

"The company will be increasing the prices of refrigerators and washing machines," Mahesh Krishnan, Vice President for home appliances, Samsung India, told IANS.

Krishnan could not give the exact percentage hike, as the company is still computing it. "We are still working on that," he said.

Industry and trade sources say that the prices would vary depending on the import content of the products. Consumer durables have 30-70 percent import content. Almost all the firms import their top-end refrigerators, air-conditioners and washing machines as 'completely-built units'. Insiders said that inflation in petroleum products and freight charges have added to the costs.

Haier, which plans to launch a six-door refrigerator series for the Indian market, said it was hiking the prices of its washing machines and LCD TVs.

"We are increasing prices by three to five percent in washing machines and LCD TVs," Eric Braganza, President, Haier India, told IANS.

Whirlpool, LG and Godrej are estimating the pressure on margins before announcing the hikes.

"Pricing is no longer an occasional event, but more dynamic, based on evaluation of the many variables that influence pricing," said Shantanu Dasgupta, Vice President, Corporate Affairs and Strategy, Whirlpool India.

He said that the basic reason for the price hike was commodity inflation and rupee depreciation. Whirlpool had increased prices of its cooling category products in May.

Consumer electronics maker Panasonic India said that there will be a slight increase in the product prices due to the rupee depreciation.

"This is the third time within a year when prices of consumer durables are increasing due to rupee depreciation and escalation in raw material costs," said Manish Sharma, Managing Director, Consumer Product Division, Panasonic India.

"We are also forced to increase the product prices from the first week of July. On white goods, the hike will be four percent, and the increment on televisions will be about two percent," Sharma told IANS.

The companies are conscious of the effect of the price rise on sales. Ganesh Ramamoorthy, Research Director, Gartner, said that in these inflationery times, the disposable income of the consumer has gone down, and he has started saving money by deferring purchases.

"If, at this point, there is a price hike, the sales of the firms would definitely be affected," he stated.

Dasgupta agrees, stating: "Disposable income in the hands of consumers has dwindled in the face of inflation in areas such as food and fuel, and the rise in interest rates. This summer, consumers have been affected not only because of the recent and sharp depreciation of the rupee, but also by a variety of other factors. The seasonal demand has been low."

The summer this year started off on a weak note, as people witnessed the coolest April in Delhi in 30 years.

According to Gartner, the INR350-billion industry will witness a growth of eight to 10 percent this year, as against almost 14 percent in 2011.