Daijiworld Media Network - New Delhi

New Delhi, Sep 27: Leading consumer electronics and appliance manufacturers are set to increase prices of air-conditioners, LED televisions, washing machines, refrigerators and other products by up to 8% from October 1, as rising commodity, freight and other input costs put pressure on manufacturers ahead of the festive season.

The latest increase will be the industry's third round of price hikes this year. Companies said sustained increases in the prices of copper, aluminium, steel and crude oil derivatives, along with higher freight costs and currency fluctuations linked to the ongoing West Asia crisis, have made further revisions necessary.

Air-conditioner prices are expected to rise by around 5-8%, while some manufacturers are also raising prices of washing machines, refrigerators and LED TVs by around 3-4%. Some companies are still assessing the impact before taking a final decision.

Companies including Blue Star, Godrej Appliances, Haier, Daikin and Super Plastronics have announced or confirmed price increases ranging from 4% to 10% across different categories. Panasonic, meanwhile, said it was evaluating market conditions before deciding on any increase.

LG and Bosch Home Comfort, which owns the Hitachi air-conditioner brand, have also raised AC prices by around 5%, according to industry sources.

Blue Star Managing Director B Thiagarajan said prices of air-conditioners and deep freezers had already increased by 5-8% because of higher commodity costs.

“Copper, steel and plastics have all become costlier,” he said, adding that the latest increase was the company's third price hike this year.

Compared with last year's festive season, costs have risen by around 15%, Thiagarajan said. However, he noted that the GST benefits available to consumers would partly offset the increase, making the net impact around 5%.

Kamal Nandi, Business Head and Executive Vice President of the Appliances Business at Godrej Enterprises Group, said another industry-wide price increase had become inevitable after commodity prices rose 8-10% since the previous revision.

He said price increases of 5-7% could be implemented across categories, with some companies raising prices from October and others from November.

Nandi also said consumers could continue to purchase products at existing prices during part of the festive season because dealers and distributors had stocked inventory before the price increases.

According to him, the existing inventory pipeline could last for around one to one-and-a-half months, meaning much of the Diwali demand could be met with products purchased at older prices. New prices are expected to become more prominent after Diwali.

Haier India President NS Satish said the company planned to increase air-conditioner prices by around 5% from October 1 and could consider further increases after Diwali and in January if input costs continued to rise.

Haier also plans to raise prices of LED TVs, washing machines and other products by 2-3%. Satish said the company could implement a cumulative price increase of around 15% between October and January, with hikes of about 5% each in October, December and January.

He said copper prices had risen sharply from around USD 8,000-9,000 per metric tonne last year to about USD 14,500, increasing manufacturing costs. An air-conditioner typically requires around 3-4 kg of copper.

Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa said the company had already increased prices by 8-10% from September 16.

He attributed the increase to a 25-35% rise in copper prices, a stronger US dollar and higher commodity costs. Despite the price pressures, he said consumer demand remained good, although prolonged global uncertainty could affect demand in the longer term.

Super Plastronics Pvt Ltd, which manufactures and markets television brands including Thomson, Kodak and Blaupunkt in India, plans to increase TV prices by around 7% after October. Appliance prices have already risen by 4-5%, according to the company.

SPPL Director Avneet Singh Marwah said higher prices could affect festive demand as consumers typically expect discounts and promotional offers during the season.

Panasonic Life Solutions India Head of Product Marketing and Planning for the AC category Abhishek Verma said the company was closely monitoring market conditions and assessing the balance between pricing and demand amid continuing cost pressures.

Meanwhile, Videotex Director Arjun Bajaj said rising freight costs and supply-chain disruptions could establish a new pricing benchmark after Diwali. Television prices for smaller screen sizes could rise by up to 20%, while larger screen sizes may see increases of up to 10%, depending on screen size.

The festive period from Onam through Dussehra and Diwali typically accounts for around 30-40% of annual sales for appliance manufacturers, making the timing of the price increases particularly significant for the industry.

While manufacturers expect higher costs to put some pressure on consumer demand, companies with pre-purchased inventory believe products at existing prices will remain available through parts of the festive season before the higher prices fully filter through the retail market.