Consumer durables prices to rise 5-10% as makers feel heat of rising input costs

New Delhi: Prices of air conditioners and refrigerators have shot up in the new year as consumer durables makers pass on the impact of rising raw material costs and higher freight charges to customers, while home appliances like washing machines may witness 5-10 per cent price hike later this month or by March.

Companies including Panasonic, LG, Haier have already reviewed prices upwards, while other makers such as Sony, Hitachi, Godrej Appliances may take a call by the end of this quarter.

According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the industry make hike prices from January to March in the range of 5-7 per cent.

With an unprecedented surge in the cost of commodities, global freight and raw materials, we have taken steps to increase prices of our products by 3 to 5 per cent in the refrigerator, washing machines, and air conditioner categories, Haier Appliances India President Satish N S said.

Panasonic, which has already increased prices up to 8 per cent for ACs, is considering hikes further. It is also mulling a similar move for home appliances.

Air Conditioners have already seen a price hike of around 8 per cent and this may further go up depending on rising costs of commodities and supply chain. We can also see a reflection of price hike for home appliances too in near future, said Panasonic India Divisional Director, Consumer Electronics Fumiyasu Fujimori.

South Korean consumer electronics major LG, which has also increased prices in the home appliances category, said a constant hike in input raw material costs and logistics cost has been a concern. We have tried best to absorb the same through cost innovations but prices need to increase for business sustainability, said LG Electronics India Vice President, Home Appliances and Air Conditioner Business Deepak Bansal.

Terming the price increase inevitable , Johnson Controls-Hitachi Air Conditioning India Chairman and Managing Director Gurmeet Singh said brands will hike prices up to 10 per cent in phases by April on account of an increase in input costs including that of raw materials, taxes, and transportation.

In a phased manner, up to April, prices will go up by at least 8-10 per cent. Prices have gone up from around the same time last year December to this year by nearly 6-7 per cent, he said adding the onslaught of Cost Up is continuing and now with anti dumping duties being imposed on aluminium and refrigerants, we see another increase by 2-3 per cent .

This will be over and above the actual commodity increase on these items and is inevitable, he added. CEAMA President Eric Braganza said:"The industry had postponed the price increase due to the festive season. However, currently, manufacturers have no other option but to pass on the price hike to customers. We expect the industry to do a round of price hike from January to March in the range of 5-7 per cent.

The implementation would vary from company to company as some of the manufacturers have already hiked prices and some are in the process of doing it, Braganza said.

Nonetheless, if the demand is sluggish and the prices of raw materials fall, there is a chance that we might see prices coming down in April or May, he said.

"We are being optimistic and hopeful that eventually the commodity prices will stabilise due to reduction in global freight and raw material costs and this should have a positive impact on consumer demand."

Companies such as Sony and Godrej Appliances said they are yet to take a call.

Price correction is not on the cards at the moment, said Sony India Managing Director Sunil Nayyar.

Godrej Appliance Business Head & Executive Vice President Kamal Nandi said going forward, the company will evaluate taking any further hike, given the current drop in demand due to increasing coronavirus infection rate.