Higher input costs and a rise in the ocean and air freight charges are expected to weigh on the prices of home appliances in the new year.
Major home appliance makers are set to raise prices in 2021.
Home appliances including TV, refrigerator, washing machines are likely to get expensive in the new year as appliances makers complain about high input prices. The coronavirus pandemic has led to supply chain disruptions across the world, which has made appliances’ input materials such as copper, aluminium and steel more expensive. Further, a rise in the ocean and air freight charges are also expected to weigh on the prices of home appliances in the new year. “We have already planned and announced a phased price hike across our product categories. This increase will be in the tune of 5 to 7 per cent, across categories,” a spokesperson from Voltas told Financial Express Online.
However, it is expected that the upcoming summer season, along with the changing lifestyle post-Covid, will continue to drive the demand for the lower penetrated product categories, in spite of these price hikes. “We are confident about further opening up of consumer sentiments in 2021, and we will be monitoring the trend very closely,” the Voltas spokesperson added.
Other major brands such as Godrej, LG, Panasonic, and Thomson are also set to raise the prices of appliances in the new year. “A rise in the commodity cost by 20 – 25 per cent, increase in ocean and air freights to the extent of 5-6 times due to shortage of containers, and the lag in the mining activity due to the pandemic is putting upward pressure on the overall input cost for appliances,” said Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association.
As a result, brands are most likely to increase prices to the extent of 8-10 per cent in near future, which may hamper the overall demand in the next quarter, added Kamal Nandi, who is also the Business Head and Executive Vice President at Godrej Appliances. The industry hopes that it will be offset to some extent by pent up demand surfacing now, he further said.
It is not only that the global brands are queuing up to raise prices; Indian brands too are all set to go for a price hike. In fact, the price rise in the domestic brands is expected to be more than global brands.
“The industry is facing a severe challenge owing to the shortage and consequent increase of almost 150 per cent in the TV Open Cell prices, along with an increase in almost all other raw material such as plastic items etc,” Arjun Bajaaj, Director Videotex, told Financial Express Online. Also, the other factor leading to a sharp rise in the prices is the three-fold increase in import freight charges compared to October 2020, Arjun Bajaaj added. Consequently, the prices can rise to the tune of 20-30 per cent.