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Consumer Durables To See 3-5% Price Hikes Amid Costlier Imports: Industry
Moreover, the depreciating Indian rupee against the US dollar has put further woes on manufacturers as imported components have become costlier, with the industry largely being dependent on imports for key components
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Prices of home appliances and consumer electronics, including TV, washing machines, and refrigerators, are expected to go up by 3 to 5 per cent from May end or the first week of June as manufacturers pass on the impact of rising input costs to buyers, according to industry players.
Moreover, the depreciating Indian rupee against the US dollar has put further woes on manufacturers as imported components have become costlier, with the industry largely being dependent on imports for key components.
Adding to the challenges, there has been shortage of parts triggered by piling up of containers at Shanghai port due to strict lockdown in the city following the surge in COVID-19 cases.
This has put pressure on the inventory of the manufacturers, and several top line products that have lesser domestic value addition and are largely dependent on imports are not available in the market.
According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA) fall of the Indian rupee against the dollar is creating more problems for the industry.
"Raw material prices are already going up and now the US dollar is going up as the Indian rupee is devaluing. All manufacturers would be now looking at the bottom line (income/profit). From June onwards, we will see a price increase of 3 to 5 per cent," CEAMA president Eric Braganza told PTI.
The hike would be in most of the product categories ranging from washing machines and cooling products such as air conditioners and refrigerators, besides other appliances.
Some AC makers have already increased prices in May but some others are expected to follow either by the end of this month or June.
"The industry would be making payment for imported materials as it starts coming in," Braganza said, adding, "if dollar is still at Rs 77.40 against the Indian rupee, the manufacturers would have to make price adjustments."
However, he also added that if the US dollar settles down in the next two weeks to the previous level of 75 then they would have not to make such price adjustments.
The rupee slumped by 15 paise to end at 77.40 against the US dollar on Thursday.
Panasonic India & South Asia CEO Manish Sharma said there is continued pressure on input costs, though the company is working to minimise the impact on consumers.
"Last price hike we undertook was in January 2022. However, with increasing commodity prices, consumers can expect a 4-5 per cent price hike soon across product categories, including refrigerators, washing machines, microwave ovens, among other appliances," he said.
Similarly, Super Plastronics (SPPL) which has branding licences for international brands that include Blaupunkt, Thomson, Kodak and White-Westinghouse is also planning to increase prices of its TV range.
In 2022, there have been lots of challenges, starting from the war, then Covid situation and lockdown in China, and now the Indian rupee falling to an all time low against the US dollar.
"All this has pushed the brands to struggle in sourcing, production and supply," said SPPL CEO Avneet Singh Marwah, adding, "As a result, there has been an increase of 20 per cent in raw material and commodity prices, we will increase product prices in June and July by 3-5% for all brands including Thomson."
Over the Shanghai lockdown, Haier Appliances India president Satish NS said it has disrupted the supply of components and the impact would be visible from June itself.
"The major impact would be on AC and flat panel TVs. Refrigerators would be less impacted," he said. However, he also ruled out that there would be any major price impact because of this.