ACs get costlier on hike in steel prices, input costs

Written by Neha Pal | Neha Pal | New Delhi | Updated: Apr 9 2010, 05:58am hrs
Consumer durable firms like LG, Samsung and Carrier have hiked the prices of air conditioners because of the recent increase in steel prices and other input costs. While Samsung has increased its AC prices by 4-5%, LG, which has more than 30% of the market share, has increased prices by 6-8%.

Ravinder Zutshi, deputy managing director, Samsung told FE, Samsung has increased the price of its air conditioners by 4-5%. The hike has become effective from April 6. The price rise is quite minimal as compared to the input costs which have gone up. We have passed on the minimal burden to the end customer since we dont want to disturb the consumer sentiment during the peak buying season.

Samsung is expecting to double its sales volume as it plans to sell 10 lakh units this year as compared to 5 lakh last year. Around 70% of the units sold are expected to be split air conditioners. The price range for Samsung split ACs in the segment of 1 tonne to 2 tonne is Rs 19,190 to Rs 34, 490. Consumers will have to pay 4-5% extra on it depending from model to model, said Zutshi.

Talking about the hike in AC prices, Ajay Bajaj, business group head, AC division at LG, said that the rise in excise duty along with the sharp rise in steel prices compelled the company to increase AC prices.

We increased our pricing last month to 3-4%. We are again planning an increase of 3-4% from April 16, said Bajaj. He said that LG is targeting to sell 12 lakh units this year as compared to 8 lakh units last year.