Auto and consumer durable companies, which have been facing higher input costs as a result of the falling rupee, have decided to pass on the rise in costs to consumers. Car makers are expected to raise prices between one and three percentage points while TV, laptop, tablet and cellphone makers will raise prices by 2-5%.
Worse, if the rupee fails to stabilise at under 60 per dollar there could be yet another round of price hikes.
Further, the ability of these companies to offer bumper discounts during the festive season beginning September will also be compromised.
“Samsung products have seen an average increase of around 3% as a result of the sharp rupee depreciation,” said Atul Jain, senior VP, Samsung India.
Sony India’s sales head Sunil Nayyar added that the company would consider raising prices 3-5% if the rupee continues to fall. Panasonic India, too, will hike prices across all categories by 5%, added Manish Sharma, MD of the company.
LG India also confirmed a price increase across categories. “We have been absorbing the increase in costs but it will become difficult to avoid this change (read: increase) in market prices,” said Rajeev Jain, sales head, home appliances, LG India.
The depreciation of the rupee has also crippled the business of domestic car companies, which were already reeling under a worst ever slowdown in demand. While companies like Honda, General Motors and Mahindra and Mahindra have already increased prices, others like Maruti Suzuki, Hyundai and Toyota are also likely to follow suit.
M&M increased the prices of all its vehicles barring XUV and Rexton by Rs 3,000 to Rs 6,000 earlier this month. GM raised prices by 1.5% in June, making its popular models Spark, Beat and Tavera costlier by Rs 5,000, R6,000 and Rs 10,000, respectively. This month, its newly-launched utility vehicle, Enjoy, became Rs 10,000 costlier.
“The weaker rupee has made imports costlier. This forced us to hike prices even though our sales declined 13% last month,” said Pravin Shah, Mahindra’s automotive division chief executive.