THIS summer may not see much hike in the price of your refrigerator if the fluctuation in the costs of inputs can be kept at bay.
According to the Consumer Electronics & TV Manufacturers’ Association (CETMA), in view of the reduction in steel prices (around Rs 2,000 per tonne as on Wednesday), there may not be much difference in the end-product prices.
“As volumes will grow, the companies would have more absorption powers. Therefore, we do not foresee any further increase in refrigerator prices. However, if the steel prices go up in future, the industry may not be able absorb the increase in input cost leading to price increase,” a CETMA official said.
Commenting on the total contribution of steel in the cost of refrigerators, industry representatives said, “It contributes about seven to eight per cent.” Mr Ajay Bajaj, Product Group Head for Refrigerators, LG Electronics India Ltd (LGEIL) said, “We are still assessing the situation. Currently, we would like to absorb the prices, but if there is a continuous upward trend then the prices may need to be reviewed.”
Steel prices have been showing an upward trend in the past four-five months for both imported as well as domestic steel. “The customs duty reduction in the recent Budget has to some extent negated the effect. But in terms of overall impact, it does hike up the manufacturing costs for products such as refrigerators and washing machines for which we are importing steel sheets,” Mr R Zutshi, Director-Sales, Samsung India Electronics, said.
“However, we are absorbing the impact of the hike at present,” he stated. An Electrolux Kelvinator Ltd official told Business Line that “With the in the price of steel, consumer durables will see 5-7 per cent price increase.”
Mr K J Jawa, Vice-President, Cooling Appliances Business Division, Voltas Ltd, was of the view that across all brands the category has seen a price increase and any further increase in steel prices would lead to a price increase of Rs 400 to Rs 500.
The durables industry is expecting to clock a growth of 10-15 per cent in refrigerators vis- -vis last year, which saw a growth of less than 10 per cent.
From thehindubusinessline.com