Rupee depreciation may not lead to immediate price hike for consumer durables, say industry insiders

The weakening of Indian rupee against the US dollar may not have any immediate impact on the pricing of consumer durable and electronics, industry insiders have told Business Today. Today, the Indian currency depreciated further to breach the Rs 80 mark and later recovered at Rs 79.88 against a dollar.

“We are closely monitoring the situation. Through effective planning we maintain component stock. Also by value innovation we always try to absorb the cost pressure and pass on to consumers only if it is necessary,” explained Deepak Bansal, Vice President-Home Appliances, LG India.

Thankfully, the currency fluctuation has happened at a time when the electronics' component prices had started to soften globally, reducing the burden on manufacturers. Industry players are looking at these decreased prices of raw materials and components which can be compensated with the increase in the value of the dollar.

“The impact of rupee depreciation has been balanced due to softening commodity prices. We will continue to watch market indicators to decide future course of action," said Manish Sharma, CEO, Panasonic India & SA. Sharma's sentiment is also echoed by Avneet Singh Marwah, director and CEO, Super Plastronics Pvt Ltd, which is a licensee of the Kodak brand. For Marwah, although rupee breaching the Rs 80-mark is not a small matter, yet its impact on consumer durables would be negligible.

“There will be no cost difference that will be passed on. But rupee breaching 80 is a large number. It has impacted largely on imports of components, and in televisions, there is around 70 per cent import of components, and this is a very big impact of 4-5 per cent. It affects festive numbers in terms of pricing.”

Just like consumer durables, even smartphones players are in wait-and-watch situation. Industry sources told Business Today that Apple isn’t looking at a price revision immediately. For a business like iPhone, the timing is not the best as price revision happens every year when Apple launches new iPhone line-up in September-October in the country.

Another big reason for the industry to absorb the price hike is not to dampen the upcoming festive season which commences from Onam and will go on till late October this year (Diwali).

“However, the depreciating rupee has compounded the headwinds facing the electronics industry. This will have an impact on the input costs pertaining to import of electronic components. Going forward, consumer electronics, such as smartphones and laptops, will get costlier by 4-5 per cent,” said Prabhu Ram, Head- Industry Intelligence Group (IIG), CyberMedia Research (CMR).

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