NEW DELHI: Depreciating rupee against USD and an increase in EMIs owing to the 40 bps repo rate hike by the RBI have posed new challenges for the consumer durables industry. The depreciating rupee is set to increase input cost for companies and most are planning to raise price of products - which means consumers planning shopping for TVs, ACs, washing machines, refrigerators will need to shell out more money.
Major companies that TNIE talked to are planning a further price hike of 3-5% soon. It is to be noted that companies have already increased prices by 7-10%. Another hike in prices accompanied with higher EMI (Equated monthly instalment) may dent sales, according to experts.
Amnish Aggarwal - Director - Research at Prabhudas Lilladher told TNIE that the depreciation in rupee will further increase the input costs and consequently the product prices. “So the EMI impact will be due to higher interest rates as well as product prices. Higher EMIs can impact sales of big-ticket items in whitegoods, electronics and laptop/PC etc.”
Manish Sharma, CEO, Panasonic India & SA said the last price hike the company undertook was in January 2022. However, he said, “With increasing commodity prices, consumers can expect a 4-5% price hike soon across product categories, including refrigerators, washing machines, microwave ovens, among other appliances.”
Avneet Singh Marwah, CEO SPPL, Exclusive Brand Licensee of Blaupunkt, Thomson, Kodak and White Westinghouse in India said there has been an increase of 20% in raw material and commodity prices and Thomson will raise prices in June and July by 3-5%.
Pallavi Singh, Sr. VP SPPL, who is heading White Westinghouse says that foreseeing this situation, the company has moved its major suppliers to India. She also mentions the possibility of an interest-sharing model for EMIs. “At the moment, the cost of EMI is borne by brands so customers can avail interest-free EMIs, however, if costs go up, we might need to work on an interest-sharing model which will in turn increase the EMI cost for customers and may dent sales,” Singh said.
Kamal Nandi, Business Head and Executive Vice President – Godrej Appliances said they have already sourced raw material stock for this month and the depreciating rupee will not impact the company in May. “When the next consignment arrives in June, the company will adjust its pricing to account for the rupee's impact.”