Consumer durables to cost more
Soaring metal prices have more than offset the impact of duty cuts that the budget offered to boost sales of the consumer durable industry, reports Ruchi Hajela. Read more...Updated: Apr 16, 2008 20:28 IST
This summer, the fight against the heat wave is likely to turn costlier - thanks to the inflation wave.
Soaring metal prices have more than offset the impact of duty cuts that the budget offered to boost sales of the consumer durable industry. Manufacturers say they might even hike prices.
Leading home appliance company Whirlpool, which has about 23.5 per cent marketshare in the refrigerator segment, increased prices of its products in January by 2 to 3 per cent.
"Prices of input materials such as steel, copper, zinc and others have increased, and this has put us under pressure to increase the prices of our products," Shantanu Das Gupta, vice president, marketing, Whirpool India, said.
Samsung India also raised the prices of its air conditioners at the end of March by about 3 per cent. "Input prices have increased, and we had to move up our product prices," Ravinder Zutshi, deputy managing director, Samsung India, said.
Despite the Finance Minister's initiative to reduce the excise duty on consumer durables from 16 per cent to 14 per cent, the industry has been hard put to contain costs, due to the galloping prices of metals and petroleum products. "The reduction in excise has outstripped the rising input costs," Gupta said.
LG Electronics (India) increased the prices of its refrigerators and air conditioners by about 2-3 per cent at the end of 2007. "The input costs have increased by as much as 17-30 per cent and so far we have been holding back an increase," V Ramachandran, director, sales and marketing, LG Electronics India, told Hindustan Times.
He added that if the prices of raw materials are not controlled, the company would have no choice but to pass on the burden to consumers.
"We are hurting quite badly," he said.