AC, refrigerator, home appliances prices to go up 5-10%; brands blame rising input costs


New Delhi: 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 per cent 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 hike prices from January to March in the range of 5-7 per cent.

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“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 per cent 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 per cent 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 per cent and this may further go up depending on rising costs of commodities and 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.

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“We have tried 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 per cent 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 per cent. Prices have gone up from around the same time last year December to this year by nearly 6-7 per cent,” he said adding “the onslaught of Cost Up is continuing and now with anti dumping duties being imposed on aluminium and refrigerants, we see another increase by 2-3 per cent.”

This will be over and above the actual commodity increase on these items and is inevitable, he added.

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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 hike from January to March in the range of 5-7 per cent.”

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 stabilise due to reduction in global freight and raw material costs and this should have a positive impact on consumer demand.”

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Companies such as Sony and Godrej Appliances said they are yet to take a call.

“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 increasing coronavirus infection rate.

Super Plastronics Pvt Ltd (SPPL), which has branding licence 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.

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“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 curfew, he said.

Due to this, there is production loss of up to 25 per cent, said Marwah adding a shortage of raw material coupled with price hike would add to this.

Price of metals and plastics used in consumer durables has risen 70 per cent along with rise in cost of semiconductor required to make a product.

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“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. Also Read: Businesses to get reasonable time to explain reasons for mismatch in GSTR-1, 3B

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The Indian appliances and consumer durable industry is expected to be around Rs 75,000 crore. Also Read: Govt agency warns Google Chrome users of malicious attacks: Here’s how to stay safe

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window.twttr = (function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0], t = window.twttr || {}; if (d.getElementById(id)) return t; js = d.createElement(s); js.id = id; js.src = "https://platform.twitter.com/widgets.js"; fjs.parentNode.insertBefore(js, fjs); t._e = []; t.ready = function(f) {

t._e.push(f); }; return t; }(document, "script", "twitter-wjs")); }

//setTimeout(function() { on_load_google_ad(); }, 5000); setTimeout(function() { on_load_fb_twitter_widgets(); }, 5000);



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Sagar Biswas

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