Durable consumer goods prices to rise 5-10% as manufacturers feel the heat of rising input costs

Prices for air conditioners and refrigerators have skyrocketed in the new year, as consumer durables manufacturers pass on the impact of rising raw material costs and higher transportation costs to customers, while household appliances like washing machines could experience a 5-10% price hike later. this month or by March.

Companies such as Panasonic, LG, Haier have already revised their prices upwards, while other manufacturers such as Sony, Hitachi, Godrej Appliances could take a call by the end of this quarter.

According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the industry is increasing prices from January to March by around 5-7%.

“With an unprecedented increase in the cost of commodities, global freight and raw materials, we have taken steps to increase the prices of our products by 3 to 5% in the categories of refrigerators, washing machines and air conditioners, ”said the chairman of Haier Appliances India. Satish NS said PTI.

Also read: Households postpone purchasing durable consumer goods amid third wave fears

Panasonic, which has already raised prices by up to 8% for air conditioners, is considering further increases. He is also considering a similar decision for home appliances.

“Air conditioners have already seen a price hike of around 8% and that could increase further depending on rising commodity and supply chain costs. We may also see a reflection of rising prices for home appliances in the near future, ”said Fumiyasu Fujimori, Panasonic India division manager, Consumer Electronics.

South Korean consumer electronics giant LG, which has also raised prices in the home appliance category, said steadily rising raw material costs and logistics costs were a concern.

“We have done our best to absorb the same through cost innovations, but the prices need to rise for the sustainability of the business,” said Deepak Bansal, LG Electronics India Vice President, Home Appliances and air conditioners.

Calling the price increase “inevitable,” Johnson Controls-Hitachi Air Conditioning India chairman and general manager Gurmeet Singh said brands would increase their prices by up to 10% in phases by April due to an increase in input costs, including those of raw materials, taxes. , and transport.

“Gradually, until April, prices will increase by at least 8 to 10%. Prices have increased by almost 6-7% between last December and this year, “he said, adding that” Cost Up’s assault continues and now, with anti-dumping duties imposed on aluminum and refrigerants, we see another 2-3 percent increase ”.

This will be in addition to the actual increase in commodities on these items and is inevitable, he added.

CEAMA President Eric Braganza said: “The industry has postponed the price increase due to the holiday season. Currently, however, manufacturers have no choice but to pass the price increase on to customers. We expect the industry to raise prices. January to March in a range of 5 to 7 percent.

Implementation would vary from company to company, as some manufacturers have already raised their prices and some are in the process of doing so, Braganza said.

“Nonetheless, if demand is sluggish and commodity prices go down, there is a chance that we could see prices go down in April or May,” he said.

“We are optimistic and hope that commodity prices will eventually stabilize due to the reduction in global freight and raw material costs, which should have a positive impact on consumer demand.”

Also read: Buyers Prepare for Shock as Productmakers Expected to Raise Tariffs

Companies such as Sony and Godrej Appliances said they had yet to answer a call.

“The price correction is not being considered at this time,” said Sunil Nayyar, Managing Director of Sony India.

Godrej Appliance Commercial Director and Executive Vice President Kamal Nandi said that in the future the company will assess any further hikes given the current decline in demand due to the increased infection rate. by coronaviruses.

Super Plastronics Pvt Ltd (SPPL), which owns a trademark license for international brands including Blaupunkt, Thomson, Kodak and White-Westinghouse, said the consumer electronics industry has observed price increases at various levels in the background.

“We assume that during the last quarter of this fiscal year, consumer electronics prices will increase across the board in most categories,” said Avneet Singh Marwah, CEO of SPPL.

There could be a delay in manufacturing due to a peak in pandemic cases as this will create a labor shortage. In addition, several state governments have instituted a weekend and night curfew, he said.

Because of this, there is a production loss of up to 25 percent, Marwah said, adding that a shortage of raw materials coupled with rising prices would add to that.

The price of metals and plastics used in consumer durables has increased by 70%, along with the increase in the cost of the semiconductors needed to make a product.

“Prices for electronics in the industry will continue to rise in the last quarter, which will hurt customer sentiment,” he added.

Videotex International, owner of the Daiwa and Shinco brands, said overall TV prices have declined since Diwali despite the continued rise in the prices of hardware inputs such as motherboard, wires, packaging, etc.

The cost of open cells has fallen in recent months, although the cost of freight has started to rise again.

“As a brand, we will not be raising our prices this month. We are currently monitoring the market situation and will decide in the coming month on the next steps, ”he said.

India’s home appliances and consumer durables industry is estimated to be worth around Rs 75,000 crore.

Discover the latest videos from DH:

Source link

About Geraldine Higgins

Check Also

Delaware Investments® Dividend and Income Fund, Inc. Announces Distributions

PHILADELPHIA CREAM–(BUSINESS WIRE)–Today, Delaware Investments Dividend and Income Fund, Inc. (the “Fund”), a closed-end fund …