Homebusiness Newscompanies News

    Consumer durables prices to go up 5-10% as makers feel heat of rising input costs

    Consumer durables prices to go up 5-10% as makers feel heat of rising input costs

    Consumer durables prices to go up 5-10% as makers feel heat of rising input costs
    Profile image

    By PTI  IST (Updated)

    Mini

    Companies including Panasonic, LG, Haier have already reviewed prices upwards, while other makers such as Sony, Hitachi, Godrej Appliances may take a call by the end of this quarter.

    Prices of air conditioners and refrigerators have shot up in the new year as consumer durables makers pass on the impact of rising raw material costs and higher freight charges to customers, while home appliances like washing machines may witness 5-10 percent price hike later this month or by March. Companies including Panasonic, LG, Haier have already reviewed prices upwards, while other makers such as Sony, Hitachi, Godrej Appliances may take a call by the end of this quarter.
    According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the industry make hikes prices from January to March in the range of 5-7 percent. With an unprecedented surge in the cost of commodities, global freight, and raw materials, we have taken steps to increase prices of our products by 3 to 5 percent in the refrigerator, washing machines, and air conditioner categories, Haier Appliances India President Satish N S told PTI.
    Panasonic, which has already increased prices up to 8 percent for ACs, is considering hikes further. It is also mulling a similar move for home appliances. Air Conditioners have already seen a price hike of around 8 percent and this may further go up depending on rising costs of commodities and the supply chain. We can also see a reflection of price hike for home appliances too in near future, said Panasonic India Divisional Director, Consumer Electronics Fumiyasu Fujimori.
    South Korean consumer electronics major LG, which has also increased prices in the home appliances category, said a constant hike in input raw material costs and logistics cost has been a concern. We have tried our best to absorb the same through cost innovations but prices need to increase for business sustainability, said LG Electronics India Vice President, Home Appliances and Air Conditioner Business Deepak Bansal.
    Terming the price increase inevitable, Johnson Controls-Hitachi Air Conditioning India Chairman and Managing Director Gurmeet Singh said brands will hike prices up to 10 percent in phases by April on account of an increase in input costs including that of raw materials, taxes, and transportation. In a phased manner, up to April, prices will go up by at least 8-10 percent. Prices have gone up from around the same time last year December to this year by nearly 6-7 percent, he said adding the onslaught of Cost Up is continuing and now with anti-dumping duties being imposed on aluminum and refrigerants, we see another increase by 2-3 percent.
    This will be over and above the actual commodity increase on these items and is inevitable, he added. CEAMA President Eric Braganza said:” The industry had postponed the price increase due to the festive season. However, currently, manufacturers have no other option but to pass on the price hike to customers. We expect the industry to do a round of price hikes from January to March in the range of 5-7 percent.
    The implementation would vary from company to company as some of the manufacturers have already hiked prices and some are in the process of doing it, Braganza said. Nonetheless, if the demand is sluggish and the prices of raw materials fall, there is a chance that we might see prices coming down in April or May, he said.
    ”We are being optimistic and hopeful that eventually the commodity prices will stabilize due to reduction in global freight and raw material costs and this should have a positive impact on consumer demand.” Companies such as Sony and Godrej Appliances said they are yet to take a call. The price correction is not on the cards at the moment, said Sony India Managing Director Sunil Nayyar.
    Godrej Appliance Business Head & Executive Vice President Kamal Nandi said going forward, the company will evaluate taking any further hike, given the current drop in demand due to the increasing coronavirus infection rate. Super Plastronics Pvt Ltd (SPPL), which has branding licenses for international brands, including Blaupunkt, Thomson, Kodak, and White-Westinghouse, said the consumer electronics industry has been observing price hikes on various levels at the backend of things.
    We are assuming that in the last quarter of this financial year, consumer electronics’ prices will be hiked on all levels across most categories, said SPPL CEO Avneet Singh Marwah. There could be a delay in manufacturing due to a spike in the pandemic cases as it will create a shortage of manpower. Moreover, several state governments have started weekend and night curfews, he said.
    Due to this, there is production loss of up to 25 percent, said Marwah adding a shortage of raw material coupled with a price hike would add to this. The price of metals and plastics used in consumer durables has risen 70 percent along with rising in the cost of semiconductors required to make a product.
    Prices of electronics across the sector will continue to increase in the last quarter which will hurt customer sentiments, he added. Videotex International, which owns Daiwa and Shinco brands said overall TV prices have decreased since Diwali despite the continuous increase in prices of material inputs such as mainboard, wires, packaging, etc.
    The cost of open-cell has come down over the last few months, though freight cost has started to increase again. As a brand, we will not be increasing our prices this month. We are currently watching the market situation and will decide in the coming month on the next steps, he said.
    The Indian appliances and consumer durable industry is expected to be around Rs 75,000 crore.
    .
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng