Manufacturers raise prices for air-conditioners, TVs and other appliances amid higher input and logistics costs, while premiumisation and financing support festive demand
Prices of air-conditioners and other consumer appliances have risen 5-8 per cent ahead of the festive season, marking the third round of price revisions this year as manufacturers pass on higher input and logistics costs. Despite the increases, companies expect demand to remain strong through Navratri and Diwali, supported by premiumisation, replacement purchases and consumer financing.
Manufacturers have attributed the latest increases to higher prices of copper, aluminium, steel and crude derivatives, along with rising freight costs and currency fluctuations. Room air-conditioners have seen some of the sharper increases, while prices of televisions, washing machines and other appliances have risen at a more moderate pace.
The festive season has started on a positive note, with manufacturers reporting healthy sales during Onam in southern India. Companies expect demand to strengthen across other markets as consumers replace ageing appliances and increasingly opt for larger-capacity, energy-efficient and feature-rich products, including smart connected appliances.
Haier Appliances India CEO N S Satish said the consumer durables industry could record 10-15 per cent growth during the festive season. Haier expects its festive-season sales by value to increase 30-35 per cent, while unit sales are projected to grow by around 20 per cent.
Satish said consumers who had already planned appliance purchases could respond to higher prices either by choosing lower-capacity models to stay within budget or by using EMI financing to upgrade to premium products. Haier increased room air-conditioner prices by around 5 per cent from 1 October, while prices of LED televisions and washing machines have risen 2-3 per cent.
At LG Electronics India, Co-Chief Sales & Marketing Officer Sanjay Chitkara said the company expects demand to strengthen from Navratri, which begins in the second week of October. The company has received encouraging pre-festive enquiries, with consumers looking beyond replacement purchases of refrigerators, washing machines, televisions and air-conditioners.
Demand is also emerging for dishwashers, microwave ovens, audio products and water purifiers, pointing to a wider upgrade cycle among households. Chitkara said improved affordability following Goods and Services Tax (GST) rationalisation, along with festive EMI schemes, could support purchases. LG’s Essential Series has also gained traction among first-time buyers in Tier-2 and Tier-3 cities.
Sony India Managing Director Sunil Nayyar expects the company’s value sales to grow 15-20 per cent during the festive season, supported by premium products, new launches and consumer offers. Sony expects its imaging business to grow more than 30 per cent, while television sales are likely to benefit from demand for larger screens and premium BRAVIA models.
The company also expects demand for headphones, soundbars and party speakers to remain strong during the festive period, as consumers increase spending on personal entertainment and home audio products.
Godrej Enterprises Group Appliances Division head Kamal Nandi said the company recorded healthy sales during Onam and expects demand to strengthen across other regions during the festive period. Godrej Appliances also increased room air-conditioner prices from 1 October.
The impact of the latest price increases may take time to reach consumers fully, as distributors and retailers continue to hold inventory purchased before the revisions. Nandi expects existing stocks to remain in the distribution channel for around one to one-and-a-half months, allowing some products to be sold at earlier prices until around Diwali.
The period from Onam through Dussehra and Diwali is a key sales window for the consumer durables industry and typically accounts for around 30-40 per cent of manufacturers’ annual sales, according to sector reports. Premium products could help companies sustain value growth even if higher prices put some pressure on unit volumes.
The Indian consumer durables market is projected to grow at an annual rate of 8-10 per cent and reach Rs 3-3.25 lakh crore by 2030, according to a joint report by Boston Consulting Group and the Confederation of Indian Industry.
(With input from agency)
