Consumer electronics companies in India including Sony, Panasonic and BPL have cut down on their local production or imports of television sets by as much as 20% ahead of the big shopping season, as slow sales in recent months have caused a pile up of inventory.
These companies have slowed production since June-July as television sales remained flat with even the cricket World Cup failing to boost demand, three senior industry executives said. The companies are saddled with stocks that they had built up expecting strong sales during the ICC World Cup that ended on July 14, the executives said.
While the industry hopes demand for TVs to improve in the festive period starting next month, it is also closely tracking sales of home appliances like washing machine. Washing machine sales, which usually peak during monsoon, were dull last month. If sales don’t revive in August, the segment too would likely see production cuts, the executives said.
“The demand for TV continues to be sluggish. July was another slow month post weak demand during the World Cup. We have cut TV production by 10-15 percent,” said Panasonic India chief executive Manish Sharma.
He said while washing machine sales in July were not in line with expectation, the trend was not concerning as of now. The company is “cautiously optimistic” while planning inventory for the festival season, he added.
BPL India chief operations officer Manmohan Ganesh said the company cut production by 15-20% since all indications suggested that market sentiments would continue to be down till the pre-Diwali period.
An executive said the country’s two top television companies, Samsung and LG, were also exploring the option. Samsung, which imports televisions from Vietnam, has already placed the order for the festive season due to the time lag in imports and hence will review the situation thereafter, the executive said.
Emails sent to Sony and Samsung remained unanswered at press time Monday.
LG Electronics India chief relationship officer Umesh Dhal, however, said there was no plan at the company to cut production, as it was witnessing good growth across categories, especially for premium products. He said the company was optimistic about the festive season when consumers upgrade their products.
Godrej Appliances’ business head and the president of the Consumer Electronics and Appliances Manufacturers Association, Kamal Nandi, said while TV makers were in distress, appliance makers were in a better position due to a harsh summer this year pushing up sales of air-conditioners and refrigerators.―Business Telegraph