- TV and home appliances to get expensive.
- All manufacturers likely to increase prices in January.
- Prices to go up by 7 to 10 per cent.
The cost of televisions, refrigerator and other home appliances can go up by as much as 10 per cent, in the second week of January, due to the rise in cost of input materials like copper, aluminium and steel and increase in ocean and air freights charges. The sellers in India are dependent on supplies from foreign markets, especially China when it comes to appliances. As a result, almost all the major brands have either decided to hike the price or are mulling over it.
"Currently the prices haven't increased but the indication from the brands are that they will go up by 7-10% in the second week of January. This would be across brands and applies to categories like televisions, refrigerators, washing machines," Nilesh Gupta, Director, Vijay Sales one of India's biggest offline retailers told India Today Tech.
Confirming that the prices will go up, TCL said that the per centage will depend on how the supply cycle is.
"At present, we are reviewing the situation but yes there will be certainly some percentage change as per industry standard but we won't be able to give out the percentage as of now as it depends on the supply cycle. It's pretty blurry to comment further," Vijay Kumar Mikkilineni, Senior Marketing Manager, TCL India told India Today Tech.
Earlier this week, LG Electronics India also confirmed to PTI that it is going to increase the price by a minimum of 7 to 8 per cent across its products in the appliance category from January 1 next year.
"From January, we are going to increase the price of 7-to 8 per cent on all products including TV, Washing Machine, refrigerator etc. There is an increase in raw material prices and metals as copper and aluminium. Moreover, crude oil prices have gone up, hence the cost of plastic materials have also gone up substantially," said LG Electronics India VP-Home Appliances Vijay Babu.
Why the latest price hike?
The biggest reason behind this price hike is believed to be the increase in cost of input materials like copper, aluminium and steel. The plastic of price has also gone up due to rise in crude oil prices.
For the TV manufacturers, the challenge is to find panels at the right price. The cost of panel has gone up, specifically for the small screen sizes.
Lastly, the transportation cost is expected to go up significantly in January with new freight charges and regulations coming into place. For those unaware, ocean freight is the method of transporting goods through the sea. The government has drafted a new Merchant Shipping Bill to replace the existing Merchant Shipping Act. One of the key features of the new bill is to regulate shipping freight. The other reason in increase in cost is the shortage of containers.
"A rise in the commodity cost by 20 25 per cent, increase in ocean and air freights to the extent of 5-6 times due to shortage of containers, and the lag in the mining activity due to the pandemic is putting upward pressure on the overall input cost for appliances," Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association recently told PTI.
However, there are others like Sony who are still in the wait and watch mode and hope for things to improve in the first half of coming year.
"With the changing supply dynamics, it is a wait and watch situation. We have observed a significant rise in demand for televisions in this period but the supply was limited due to unavoidable factors and other extraneous issues. Now that the situation is changing, we are expecting things to get more stable by first half of the next year," Sony India Managing Director Sunil Nayyar told India Today Tech.
It will be interesting to see if the price hike remains to be a permanent move or the industry manages to bounce back with the pent-up demand.