Prices of consumer durables to go up

Air-conditioners, refrigerators, televisions and washing machines will soon cost Rs500 to Rs3,000 more. Most companies are planning to hike prices in the next few weeks owing to higher import costs because of a weakening rupee.
LG and Samsung are reviewing prices, while Onida implemented a 2-3% increase last week. Videocon, on the other hand, is monitoring the situation and is yet to take any decision.
“A 3-8% increase across all categories and products is being considered. It all depends on the stable outlook of the currency.
We have held the prices through the festival season with only nominal hikes in September,” said V Balachandran, director, marketing, LG Electronics India Pvt Ltd. LG had increased prices by 4-6% in May.
The other Korean major, Samsung India, also increased prices by Rs200-500 for flat-screen televisions and a similar amount for refrigerators in August.
Samsung will take a decision within a week, said a company spokesperson. A lot of products are manufactured locally at their plants in Noida and Chennai and so import overheads are less.
Higher end products such as LCD televisions have seen maximum increase in prices because either the entire product or a majority of its components are imported, adding to the costs as the rupee weakens against the dollar.
But some relief may come in the next three months with commodity prices falling. “Commodity prices, especially those of copper, have fallen by almost half.
These form a major component of consumer goods, yet since most manufacturers import these, they are paying a higher price,” said Saurabh Dhoot, director, Videocon Industries Limited.
However, despite a majority of players hiking prices, sales don’t seem to have taken a hit.
According to figures provided by the companies, LG sales grew by 50% this Diwali, while Samsung grew by 35% and Onida too by 35% in October 2008 in comparison to October 2007.
One can only wait and watch if the fresh round of prices hikes will affect volumes.