An increase in the prices of consumer durables is imminent, but companies are unwilling to make the first move. “Steel prices have gone up significantly and this has pushed up costs by almost 8 per cent. We are still working out exactly how much needs to be passed on to consumers,” says Ravinder Zutshi, Deputy MD, Samsung India.
In fact, the hike is imminent for other reasons as well. “Apart from higher steel and copper prices, companies have to comply with Bureau of Energy Efficiency Standards, and that’s going to affect the prices of players who have to now invest in compressors that meet the norms. We already have products that are compliant with energy norms. We are weighing options and will try to absorb the increased costs as much as possible,” says Jyoti Shekhar, VP (Marketing), Videocon Industries.
Clearly, competition is a key deterrent. Says V. Ramachandran, Director (Sales & Marketing), LG Electronics India: “I do foresee a hike in the prices of washing machines, refrigerators and ACs, but it’s an extremely competitive market.” Apparently, players that rely on China are under pressure to hike prices, since many have already negotiated for increased prices.
— Shamni Pande