The consumer appliances and electronics sector, barring washing machines, has witnessed almost flat growth in the first half of this fiscal largely due to rupee depreciation that has spiked input costs, according to industry body CEAMA.
The consumer appliances and electronics sector, barring washing machines, has witnessed almost flat growth in the first half of this fiscal largely due to rupee depreciation that has spiked input costs, according to industry body CEAMA. In some segments like TV and AC, there was de-growth in volumes, while refrigerator sales were almost flat, Consumer Electronics and Appliances Manufacturers Association’s (CEAMA) outgoing President Manish Sharma said.
The only respite for the industry was the festive season sales in October, when it reported good single-digit growth.
“YTD (year-to-date) till September 2018, there was either de-growth in certain categories or flat, except for washing machines,” Sharma told PTI.
“If we add the October sales (Diwali period), these were better and because of that, YTD till October closed around 3 to 4 per cent,” he added.
The industry was hoping for double-digit growth this year after emerging from the impact of GST and demonetisation, but was hit by rupee depreciation which hiked input costs, which were mostly passed on to the consumers, Sharma said.
“The industry was looking for double-digit growth, but the way things moved up amid the depreciation of the rupee, which led to an increase in cost…, YTD growth is only 3 per cent,” said Sharma, who is also the president and CEO of Panasonic India and South Asia.
Speaking on festive season sales, he said: “October was thankfully promising and specially, the run-up of last 10 days of Diwali added up to overall growth so far.”
However, for the entire fiscal, Sharma expects the growth to be around 7 per cent, saying that the momentum is still “positive” post festive sales.
“I am hopeful that this year, we will close at positive but with single-digit growth, which would be lesser as compared with overall expectation,” he said, adding that “for the year, we expect the growth would be around 6 to 7 per cent.”
According to experts, although manufacturing in India has increased, the industry imports around 65 per cent of the components.
On the policy front, Sharma said the “policy environment” for the sector is positive and “some of the measures, such as GST, would start showing their impact in the medium term”.
“This has provided a springboard opportunity to look at higher growth and in that process, some temporary loss of growth has happened,” Sharma added.
Meanwhile, newly-elected CEAMA President Kamal Nandi said the industry would ask the government to lower the GST rate levied on it to 12 per cent from the existing 18 per cent.
“Once GST rates come down, we can see good growth. This has happened with drop in GST rates for washing machine,” he added.
“This has happened with microwaves ovens also, which has not grown for 3-4 years, (but) has witnessed very good growth post drop in GST,” said Nandi, who is also Godrej Appliances Business Head and Executive Vice President.
Haier India President Eric Braganza said that overall the industry is not very optimistic for 2018.
“The prices are going up and the GST rates are not coming down. We do not have any stimulus,” he said.