Consumer durable companies are set to hike prices of products across the segment after sluggish sales during the festive season as well as to beat high input cost amid high crude oil price and depreciating rupee. In the festive time, to not let higher prices affect smooth sales, companies had absorbed a part of increased production cost and custom duty.
But in view of the market sentiments, the companies are now forced to hike rates by up to 7%. Nonetheless some companies have already increased prices.
"Over the last few months, the rupee has continually risen which in turn is impacting our inputs costs. While we try to absorb maximum costs for our consumers, but given the market situation, we will be forced to hike the prices by 5-7 per cent from next month," Panasonic India President and CEO Manish Sharma is quoted as saying in a PTI report.
Haier India President Eric Braganza said: "We have ensured that the price rise comes into effect post the festive season since India tends to purchase consumer durables extensively during this time.
Braganza further added "the decision was undertaken considering that cushioning of prices was no longer an option with tight margins coming into play."
The previous hike of around 3-4% was not implemented in the month of September."Though the MRP was increased, the price hike undertaken in September did not really get effective, due to sluggish demand and brands trying to garner maximum share in the market place during the crucial festive season," said CEAMA President Kamal Nandi.
Nandi, who is also Godrej Appliances Business Head and Executive Vice President further noted that "Onam was a washout for the industry due to the Kerala floods and the festive season did not perform as per initial expectations".
Given the market conditions, the market for consumer durables has been largely flat due to rupee depreciation and consequent input cost increase.
With PTI Inputs