Get ready to pay more for home appliances and other electronic goods.
Consumer durable makers are readying for the third round of price hike in 10 months to offset cost pressures, thanks to a depreciating rupee and escalating raw material prices. Companies including Panasonic and Canon have decided to raise price by 2-5% from the next month. Many others including Whirlpool, LG, Godrej are estimating the pressure on margins before announcing the hikes.
“We are increasing prices by at least 3% due to the continuous increase on input costs,” said Manish Sharma, managing director, Panasonic India. “Most of our appliances are imported from Thailand and Malaysia and it is imperative for us to consider the option of price hike.” The company increased prices of refrigerators and washing machines by 4% in January.
Digital imaging firm Canon is also raising product prices by 5%. “Prices require revision immediately,” said Alok Bhardwaj, senior vice-president, Canon.
Production of consumer durables dropped to 5.3% last year against 14.6% in 2010. Prices of consumer goods have surged over 10-20% in the last one year due to the rupee’s devaluation, said Manufacturers Association for Information Technology (MAIT) . “Another round of price hike is justified and the entire industry will respond to it by next month,” said Bhardwaj, who also heads MAIT.
The move will hit an already depressed consumer durables market, which saw major companies missing their sales targets last year due to a poor uptick in demand. “This year too, demand for air conditioners, refrigerators is extremely soft due to the spoilsport monsoon,” said Shantanu Das Gupta, vice-president, Whirlpool India. “Hike is the only option available.”