Output cost of LCD televisions to plunge 50%

Written by Mona Mehta | Mumbai | Updated: Jul 9 2009, 08:35am hrs
Manufacturing costs of liquid crystal display (LCD) televisions are expected to be cheaper by 50% following the announcement of customs duty cuts on LCD panels from 10% to 5% in the Budget, according to branded consumer electronics majors.

Ravinder Zutshi, deputy managing director, Samsung India, told FE: "Currently, LCD TV panels constitute 60% of the manufacturing costs of LCD TVs. Since customs duty on LCD panels is reduced from 10% to 5%, there will definitely be a positive impact in terms of manufacturing costs reduction of LCD TVs."

Samsung India, which manufactures LCD TVs in Chennai and Noida, has started running a month-long promotion from July 1, 2009, where, on purchase of any LCD TV, customers can avail themselves of Airtel set-top boxes free. "Only after the promotion gets over, we will be able to decide whether we will pass on the price benefit on LCD TVs to customers," Zutshi said.

According to Amitabh Tiwari, director-consumer electronics, LG Electronics India, "Cut is customs duty on LCD panels will benefit customers in the near future as prices of LCD TVs could dip. We are evaluating plans to reduce manufacturing costs of LCD TVs. We have yet to decide on passing the price benefit to consumers. We have registered a 257% growth in LCD TVs and 353% in Slim TVs between January and April 2009." During the same period, the market for LCD and plasma TVs grew by 81.6% over the corresponding period of the previous year, according to ORG numbers. LG Electronics India has registered a 257% growth in LCD TVs and 353% in slim TVs, while its competitor Samsung India has witnessed a 100% growth as far as flat panel TVs (LCD, LED and Plasma TVs) are concerned.

Currently, LCD TVs and Plasma TVs markets contribute 1.8% to the overall CTVs market.

VN Dhoot, chairman, Videocon Industries, however, opines that 5% customs duty reduction on LCD panels will have marginal impact on manufacturing costs and thereby minimal price reduction on buying LCD TVs.