Cold summer for durables

After a total washout last summer, consumer durables, especially cooling products, are facing yet another difficult summer. While sales are almost half of 2019 summer, production is down by 60 to 70 per cent.

"Due to the nation-wide lockdown last year, summer sales were completely lost. This time, the second wave and the lockdowns in some of the states and an overall fear about the pandemic has affected the sales. If we compare with a good summer of 2019, this year's sales are 45 to 50 per cent," said Kamal Nandi, head executive VP, business at Godrej Group.

The onset of the summer season was strong, as the distribution channels were stocking up in March. Expected price hikes in April on account of rising commodity prices also led to the demand across the channel. However, the second

Covid wave has been a dampener for secondary sales across key geographies in the country, with the south faring marginally better than other regions, says Motilal Oswal Financial Services.

For cooling products like air-conditioners, air-coolers and fans, almost 50 per cent of the yearly sales happens during the March to May season.

Further, production also is down to 30-40 per cent of the 2019 summer, as the oxygen needed at production units has been diverted for Covid patients. Most of the units are either shut or working at a fraction of their said Nandi.

Though manufacturing is down, there is no let up in the uptrend in commodity prices, with prices of metals such as copper, aluminium and steel going up by 16 per cent, 7 per cent and 10 per cent, respectively, in a quarter. Prices have zoomed 30 to 60 per cent in a year. The trouble is that despite the higher input costs, consumer durable companies were not able to hike prices in April due to subdued demand and aggressive marketing by deeppocketed players like Samsung.

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