People planning to buy air-conditioners, TVs, washing machines, refrigerators and other home appliances around Diwali may have to pay more as manufacturers are preparing to raise prices from October 1.
Major consumer electronics and appliance companies are planning price hikes of around 5-8% ahead of the festive season. Rising prices of copper, steel, aluminium and other raw materials, along with higher freight costs and currency fluctuations, are adding to manufacturers’ expenses.
This will be the third round of price increases for some companies this year. Air-conditioners are expected to become 5-8% more expensive, while prices of washing machines, refrigerators and LED TVs could rise by around 3-4%.
The price increases come just as India enters its major festive shopping season. While manufacturers are concerned that higher prices could affect demand, consumers may still be able to buy some products at existing prices because dealers have stocks purchased before the latest hikes.
Major brands confirm price hikes
Companies including Blue Star, Godrej Appliances, Haier, Daikin and Super Plastronics have announced or confirmed price increases ranging from 4-10% across various categories. Panasonic, meanwhile, said it was still evaluating market conditions before taking a decision.
LG and Bosch Home Comfort, which owns the Hitachi air-conditioner brand, have also reportedly increased AC prices by around 5%.
Blue Star cites rising commodity costs
Blue Star Managing Director B Thiagarajan said prices of ACs and deep freezers have already increased by 5-8% because of higher commodity costs.
He said copper, steel and plastics have become more expensive, adding that this is the company’s third price increase this year.
Compared with last year’s festive season, costs have increased by around 15%. However, with GST benefits of about 10% now available to consumers, the effective increase for buyers would be around 5%, he said.
Godrej expects more price increases
Kamal Nandi, Business Head and Executive Vice President of the Appliances Business at Godrej Enterprises Group, said another industry-wide price increase had become necessary after commodity prices rose 8-10% since the previous revision.
He said prices could rise by 5-7% across categories, with some companies implementing the increase from October and others from November.
However, consumers may still find products at current prices during the festive season because older inventory remains in the distribution network. Nandi said this stock could last for around one to one-and-a-half months, meaning much of the Diwali demand may be met with products carrying old prices.
Haier plans further price increases
Haier India President NS Satish said the company plans to increase prices of room air-conditioners by around 5% from October 1.
The company may also raise prices after Diwali and again in January if input costs continue to increase. Prices of LED TVs, washing machines and other products are expected to rise by around 2-3%.
Satish said copper prices have increased significantly over the past year, adding to manufacturing costs, particularly for air-conditioners.
He said Haier could implement a cumulative price increase of around 15% between now and January, in three stages of about 5% each.
Rising copper prices push up AC costs
According to Satish, copper prices have increased from around $8,000-$9,000 per metric tonne last year to about $14,500. An air-conditioner typically requires around 3-4 kg of copper, making the rise in copper prices a major cost factor for manufacturers.
The festive period from Onam through Dussehra and Diwali generally contributes around 30-40% of annual sales for appliance manufacturers, according to industry reports.
Daikin raises prices amid cost pressure
Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa said the company had already increased prices by 8-10% from September 16.
He attributed the increase to higher copper and other commodity prices, as well as a stronger dollar. He said companies are facing significant cost pressures.
Jawa said consumer demand remained strong for now, although prolonged cost increases could affect demand in the longer term.
TV prices may rise further after October
Super Plastronics Pvt Ltd (SPPL), which manufactures and markets television brands including Thomson, Kodak and Blaupunkt in India, plans to increase TV prices by around 7% after October. Prices of other appliances have already increased by 4-5%, the company said.
SPPL Director Avneet Singh Marwah said higher prices could affect festive demand because consumers usually expect discounts and promotional offers during the season.
Panasonic and Videotex assess market impact
Panasonic Life Solutions India Head of Product Marketing and Planning for ACs, Abhishek Verma, said the company is monitoring market conditions and assessing the balance between pricing and consumer demand.
Videotex Director Arjun Bajaj said rising freight costs and supply-chain disruptions could lead to a new pricing benchmark after Diwali.
He said prices of smaller-screen TVs could rise by up to 20%, while larger-screen models could see increases of up to 10%, depending on screen size.