Air-conditioners and other consumer appliances have become 5-8% more expensive ahead of the Diwali season, but manufacturers are still expecting strong festive demand as consumers opt for premium products, replace older appliances and take advantage of easier financing.
The latest price increase is the third round of hikes this year, with manufacturers passing on higher costs of copper, aluminium, steel and crude derivatives, along with rising freight expenses and currency fluctuations.
Despite the higher prices, companies entered the festive season on a strong note after healthy sales during Onam in southern markets. They expect demand to remain firm through Navratri and Diwali, supported by improving consumer sentiment and wider access to financing.
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Haier Appliances India CEO N S Satish expects the overall industry to grow 10-15% in value during the festive period. Haier is targeting 30-35% value growth and around 20% growth in unit sales.
Satish said the latest price increases may have only a limited impact on demand because consumers who have already decided to buy are likely to adjust their purchases rather than walk away. Some may opt for lower-capacity models to stay within budget, while others could use EMI options to upgrade to premium products.
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Haier has increased room air-conditioner prices by around 5% from October 1. Prices of products such as LED televisions and washing machines have risen by 2-3%.
LG Electronics India is also positive about the season. Co-Chief Sales and Marketing Officer Sanjay Chitkara said pre-festive enquiries have remained encouraging. The company expects demand not only for refrigerators, washing machines, televisions and ACs, but also for dishwashers, microwave ovens, audio products and wate r purifiers.
Improved affordability following GST rationalisation and festive EMI offers are expected to support purchases. LG also sees traction for its Essential Series among first-time buyers in Tier-2 and Tier-3 markets.
Sony India expects festive value growth of around 15-20%. The company sees premium BRAVIA televisions, larger screens, new launches and consumer offers driving demand.
Its imaging business is expected to grow more than 30%, while audio products such as headphones, soundbars and party speakers are also expected to perform well.
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Godrej Enterprises Group expects sales to gain momentum beyond the Onam season. Appliances head Kamal Nandi said existing distribution inventory could cushion the impact of higher prices.
Products bought by dealers before the price revisions may remain available through Diwali, with newer prices expected to have a bigger impact after the festive period.
The festive window from Onam to Dussehra and Diwali typically contributes 30-40% of annual appliance sales. The Indian consumer durables market is projected to grow 8-10% annually and reach Rs 3-3.25 lakh crore by 2030, according to a BCG-CII report.
(With PTI Inputs)
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