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Durables Industry To Be In Red Zone If Component Supply Does Not Improve By April

Appliances and consumer electronics industry, which source components mainly from China, maybe in the “red zone” if the supply of materials impacted by coronavirus pandemic does not improve by next month, according to an industry body.

Prices of consumer durables products as airconditioners, televisions and refrigerators, are being revised by the manufacturers due to supply constraints, the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said.

According to the CEAMA, though factories in China have started operating but they are still operating at around half of their capacity.

Moreover, if the availability does not improve by April, then the industry would be in “red zone”.

“The coronavirus attack had a negative impact on consumer durables sector due to its dependency on imports from China – be it for finished goods or components. We have received reports that plants in China are operating at 50-60 percent capacity, but production has begun now,” CEAMA President Kamal Nandi said.

“Prices for consumer durables, especially in categories like ACs, televisions and refrigerators, are being revised by industry players,” he said adding, “As of now the finished goods are available but the industry will be in the red zone if things don’t improve by April.”

The Indian appliances and consumer electronics industry is largely dependent on China for the sourcing of components and some of the finished goods.

According to a joint report by CEAMA and Frost & Sullivan, the industry had a total market size of Rs 76,400 crore in 2018-19, in which Rs 32,200 crore was contributed from domestic manufacturing.

While, Nandi who is also Godrej Appliances Business Head and Executive Vice President, said that it is increasing the prices of its range of Acs from 2 percent to 3 percent.

“Godrej will be taking a 2-3 percent price hike in ACs in the second half of March,” he said.

“The short supply of components, increase in customs duty and higher logistical cost of air lifting components are key triggers for the price hike. Given the high seasonality of cooling categories like ACs and refrigerators, the shortage of stocks is bound to hit revenue for summer,” he added.

―Financial Express

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