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New Delhi: Contrary to expectations that thin flat screen TVs would become cheaper after the government reduced customs duty on LCD panels to 5 per cent, Korean major LG said it is not in a position to pass on the benefit to consumers as the cost of panels has gone up.
"We increased our LCD TV prices by an average of 5 per cent from July 1, 2009 and are not in a position to roll it back immediately. The prices hence are not dropping as reported," LG India Business Head Amitabh Tiwari said in a statement.
He said the cost of modules (panels) has increased by almost over 30 per cent beginning July and will continue till year end. Cost of the module is almost 70 per cent of the cost of an LCD TV, he added.
"The drop of five per cent on 70 per cent in reality means two per cent on the complete LCD TV. The module increase however is stiffer than the relief," he said.
Tiwari said the Indian market is still in its nascent stage for panel TV and out of 14.5 million TVs, panel televisions account for only 10 per cent of the market.
"The business is yet not very lucrative and in efforts to drive the business and market size, the profits are generally compromised," he added.
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