Rising prices of most metals, including steel and copper, shortages of semiconductor chips and rising cargo fares have led to a sharp increase in costs for consumer durables companies. However, in view of the good demand during festivals, the companies have not increased the prices of their products for the time being. However, industry sources say that companies will increase prices in a phased manner after Diwali.
Consumer electronics prices are expected to increase by 7 to 10% after the festivals. Several consumer durables manufacturers say they have avoided increasing prices on account of festivals, but want to hike prices after November.
Kamal Nandi, executive vice-president, Godrej Appliances, says that the commodity prices have increased by 22 per cent in the last few months. Freight for components imported from China has increased four to five times. But companies have not raised prices much in comparison. It will be the compulsion of the companies to pass the burden of the increased prices on the consumers after the festivals. After the festivals, the prices can be increased by 5 to 10 per cent in a phased manner.
Gaurav Shah, Business Head (Airconditioner Group), Panasonic India, said, "Our sales have grown by 20 per cent during Navratri. A further increase is expected in Diwali. Especially the demand for AC, Fridge and TV of the premium range is high. AC and refrigerator prices have increased by 3-5% in the July-September quarter due to higher commodity and container/freight prices. However, due to festivals, the price has not been increased at the moment. But we are keeping an eye on the cost to increase the prices in future.
Eric Braganza, president of the Consumer Electronics and Appliances Manufacturers Association, says commodity prices have risen 15 to 20 per cent in a year. Manufacturers are increasing prices in a phased manner by reducing margins. Though there will be no increase in the prices on the occasion of festivals. But after the festivals, the prices may increase in two to three phases.