1 hr ago
Appliance Makers Forecast Festive Growth Despite Price Hikes
Appliance companies have raised prices by 5-8 percent this year.
They say materials, shipping and currency changes have made it more expensive to make and sell products.
Even so, they expect many people to shop during the festive season.
Some shoppers are choosing bigger or more advanced products, and others are replacing older appliances.
Easy payment plans may help people afford purchases.
Some older Godrej products may still be sold at earlier prices for much of Diwali.
Festive sales are important because they usually make up 30-40 percent of appliance makers’ yearly sales.
Appliance makers expect double-digit festive sales growth despite price increases of 5-8 percent.
Companies cite higher metal and crude-linked material costs, freight charges and currency movements for the latest increases.
Haier India expects festive sales value to rise 30-35 percent, with unit sales up about 20 percent; its industry growth estimate is 10-15 percent.
LG and Sony expect demand for upgrades and premium products, while financing offers may help buyers manage costs.
Godrej says older inventory could remain available at previous prices through much of Diwali before new rates take fuller effect.
- Who
- Appliance makers including Haier India, LG Electronics India, Sony India and Godrej Appliances.
- What
- Companies raised prices by 5-8 percent but expect festive sales growth, supported by premium-product demand, upgrades and financing.
- Where
- India.
- When
- The latest price increases are the third round this year; some took effect from October 1, ahead of Navratri and Diwali.
- Why
- Higher material and freight costs and currency movements prompted price rises, while companies expect seasonal demand and affordability measures to support sales.
Factors that could restrain demand
Factors supporting festive sales
Higher prices and costs
Factors that could restrain demand
Price increases of 5-8 percent could affect sales volumes, while higher material and freight costs and currency movements are driving further price revisions.
Factors supporting festive sales
Companies expect premium-product demand, replacement purchases and consumer confidence to sustain festive sales despite the price increases.
Affordability
Factors that could restrain demand
Higher prices may make appliances less affordable for some buyers.
Factors supporting festive sales
LG expects GST rationalisation and festive EMI offers to improve affordability, while Godrej says older stock may be available at previous prices through much of Diwali.
Key facts
- Latest price increases
- 5-8 percent; the third round of price revisions this year
- Haier festive sales value forecast
- 30-35 percent growth
- Haier unit sales forecast
- Around 20 percent growth
- Haier industry growth estimate
- 10-15 percent
- Sony festive sales value forecast
- 15-20 percent growth
- Sony imaging business forecast
- More than 30 percent growth
- Festive season share of annual sales
- Typically 30-40 percent for appliance makers
- Godrej older inventory
- Could be sold at previous prices through much of Diwali
Sources
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