India’s consumer durables space — which is heavily reliant on the import of components from China — is facing severe challenges in the wake of the deadly coronavirus. Compressors, open-cell panels, motors are largely imported from China for the manufacture of air conditioners, televisions and refrigerators. With factories in China operating at a lower capacity than normal, consumer durable makers are now seeing a severe supply crunch of components.
“We were well stocked until last month, but now a lot of stock is depleted and needs to be replaced,” an industry official said. “The short supply of components coupled with the custom duty hike will force us to hike prices.”
Major price hikes are likely to be seen in categories like ACs, televisions and refrigerators. On an overall basis, prices across consumer durables space are likely to be hiked by 3-5 percent. This is the first phase of price hikes, say industry officials.
“We will be taking a 2-3 percent price hike in ACs in the second half of March. The short supply of components, increase in customs duty and higher logistical cost of air lifting components are key triggers for the price hike,” said Kamal Nandi, business head and executive vice-president of Godrej Appliances.
Television is also one category which is likely to see price hikes in the range of 3-5 percent, on the conservative side. “Panel prices are hardening and therefore we will be taking price hikes in the range of 3-5 percent for televisions,” said Eric Braganza, president, Haier Appliances India.
Prices of refrigerators may also be hiked in mid-March or early April. No immediate price hikes for washing machines are expected anytime soon.
With summer expected to be intense this year and an important period for sales especially in the AC segment, consumer durables makers are hoping for a good season.
Many companies are looking at offering cashback deals and exchange schemes on selected products. However, promotions are likely to be muted.―CNBC TV18