White goods makers may raise prices again
NEW DELHI: Televisions, washing machines and refrigerators are set to cost more, as white goods companies are considering further price hikes to counter a weakening rupee and unusually high raw material prices. “We are under tremendous pressure. We have to do a tradeoff between volumes and margins.we increased air-conditioner prices by 7-9% in the March quarter. We will have to increase washing machines prices by 4-5% in June. We will do a staggered price increase. Within the refrigerators portfolio, we raised prices last month,” said Satish N.S., president, Haier Appliances India Pvt. Ltd.
Panasonic India may also increase the price of washing machines again in July as plastic prices remain high. “While there is continued pressure on input cost, we have been working to minimize the impact on consumers. With increasing commodity prices, we have recently increased prices by 4-5% across product categories, including air conditioners, refrigerators, and washing machines, while ensuring minimal impact on consumers,” said Manish Sharma, chief executive, Panasonic India and South Asia.
Sharma, however, said the Centre’s announcements to help mitigate the impact of inflation were “encouraging”, referring to the weekend’s reduction in fuel duties. “We hope to see a lastmile impact soon,” added Sharma. Panasonic reported 60% growth in April over the corresponding period of 2019.
With retail inflation surging to an eight-year high last month, steps taken by the government, including a customs duty cut for raw materials such as coal, plastic and steel, will play a critical role in providing respite and curbing further rise in prices, said Dinesh Chhabra, chief executive officer, Usha International.
However, Kamal Nandi, business head and executive vice president, Godrej Appliances, said the gap between inflation and price hikes is still “very wide”at about 15%. “Companies will need to take 3-4% price hikes every quarter for the next few quarters if prices do not cool down soon enough.” He said a weakening rupee was also weighing heavy on imports.
Despite taking a 5-7% price hike in April on select products, BSH Home Appliances said it might have to initiate another round of price hikes this quarter. “The consumer durables industry has witnessed unprecedented levels of inflation owing to supply chain disruptions. Hence, price hikes are inevitable,” a spokesperson said.
In an April report, ICICI Securities analysts said prices of key raw materials used in the durables industry such as copper, steel, aluminium and high-density polyethylene were up 19.5% to 62.7% year-on-year. “We believe steep inflation in input prices will likely affect profitability of durable companies in FY23,” they said. White Westinghouse, too, is set to raise prices across TV, washing machines and ACS. Pallavi Singh, senior vice president, SPPL, the exclusive brand licensee of White Westinghouse in India, said a depreciating rupee impacted raw material costs, especially for imported products.