look news india
Common consumers planning to buy home electronics goods just before big festivals like Dussehra, Dhanteras and Diwali are going to get a big shock of inflation. The country’s major consumer durables and electronics manufacturing companies have decided to increase the prices of air conditioners (AC), television (Smart TV), washing machines and refrigerators by 5 to 10 percent from October 1. Usually, during the festive season, companies offer attractive discounts, offers and EMI schemes, but this time due to huge increase in input costs and increase in logistics expenses, companies are being forced to increase their prices. In such a situation, it is sure to have a direct impact on the budget of middle class families who upgrade their homes by purchasing new appliances during festivals.
The biggest reason behind electronics equipment becoming expensive is the huge rise in the prices of major basic raw materials in the international market.
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Metal prices at record level: Global prices of copper, aluminum and steel, which are most commonly used in the manufacturing of TVs, ACs, refrigerators and washing machines, have seen an increase of 15 to 20 percent in the last few months.
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Compressor and motor costs increased: Compressors used in air conditioners and refrigerators and motors of washing machines consume a lot of copper, which has directly increased the manufacturing cost of these key components of the appliances.
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Open-cell and display panels are expensive: About 60 to 65 percent of the total cost of a smart TV is its display panel (Open-Cell). Open-cell import prices have seen a steady rise due to production cuts and supply disruptions by panel manufacturers globally.
Apart from raw materials, huge surge in international freight rates has also become a major reason for setting prices on fire.
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Container rates rise: Container shipping charges have increased two to three times in the past few months due to geopolitical tensions and security risks in global trade waterways.
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Impact of import dependence: Although assembling has increased in India under ‘Make in India’, domestic companies are still dependent on imports from countries like China, Taiwan, South Korea and Vietnam for semiconductor chips, high-end displays and advanced electronic components. The companies are going to pass this additional cost of freight directly to the pockets of the end customers.
Under the new pricing, which will come into effect from October 1, various categories of devices may see an additional increase ranging from Rs 1,000 to Rs 5,000:
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Smart TV: The prices of 32-inch budget models are likely to increase by Rs 800 to Rs 1,500 and the prices of 43-inch to 55-inch and larger 4K TV models are likely to increase by Rs 2,500 to Rs 4,500.
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Air Conditioner (AC): The prices of split and inverter ACs may increase by 5 to 8 percent, which will result in a difference of Rs 1,500 to Rs 3,000 per unit.
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Refrigerator: Single door refrigerators may see an increase of Rs 800 to Rs 1,200 and double-door or frost-free models may see an increase of Rs 2,000 to Rs 3,500.
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Washing Machine: An increase of Rs 1,000 to Rs 2,500 in the prices of semi-automatic and fully-automatic washing machines is considered certain.
Top executives of major companies like LG, Samsung, Voltas, Daikin, Panasonic and Haier say that they have been bearing the burden of increased input costs for the last several months so that demand remains intact. But now the pressure of raw material and shipping costs has become so high that it has become inevitable to revise prices to protect margins.
Companies also say that in view of the festive season, they will try to attract customers through aggressive bank cashback, no-cost EMI and exchange offers, but the impact of the increase in base price will definitely be reflected in the final bill.
Market experts and retailers believe that if a family has a firm plan to buy a TV, fridge, AC or washing machine this festive season, then purchasing the ongoing stock before October 1 can be a financially wise move. Currently, there is old inventory stock available in retail stores and e-commerce platforms, which is available at old prices only. Consumers can make direct savings of Rs 2,000 to Rs 5,000 by purchasing before the price hike comes into effect.