AC, TV prices rise 5-8% ahead of festive season, but appliance makers expect double-digit sales growth

As per the latest business developments, Air-conditioner and other consumer appliance prices have risen 5-8% ahead of the festive season, but manufacturers expect firm demand to drive double-digit sales expansion as consumers opt for premium products, replacements and easy financing.

The latest price gain is the third round of revisions this year. Manufacturers have cited elevated costs of copper, aluminium, steel and crude derivatives, along with rising freight expenses and currency fluctuations, for the hikes.

Despite the price increases, the industry has started the festive season on a positive note, with manufacturers reporting firm sales during Onam in southern India. Firms expect demand to stay healthy through Navratri and Diwali, supported by premiumisation, replacement demand and consumer financing.

Consumers are increasingly moving towards larger-capacity, feature-rich and energy-efficient appliances, as well as smart connected products. While elevated prices could weigh on volumes, the shift towards premium products is anticipated to backing overall value expansion.

Some manufacturers additionally expect the impact of the price hikes to be limited in the near term as dealers and distributors have stocked products bought at earlier prices through pre-buying schemes.

Haier Appliances India CEO N S Satish told PTI that the industry is likely to record double-digit expansion during the festive season. Haier anticipates its festive sales by value to climb 30-35%, while unit sales could grow around 20%. Satish anticipates industry-wide expansion of around 10-15%.

According to Satish, consumers who have already scheduled an appliance purchase may either opt for a softer-capacity product to stay within budget or use EMI financing to upgrade to a premium model.

Haier has boosted room air-conditioner prices by around 5% from October 1, while prices of products such as LED TVs and washing machines have increased 2-3%.

Premium products, financing to drive demand

LG Electronics India Co-Chief Sales & Marketing Officer Sanjay Chitkara stated the firm stays optimistic around the festive season, which begins with Navratri in the second week of October.

The firm has noted encouraging pre-festive enquiries and anticipates demand to benefit from home purchases and upgrades. Consumers are not only replacing refrigerators, washing machines, televisions and air-conditioners but are additionally showing interest in dishwashers, microwave ovens, audio products and water purifiers.

Improved affordability following GST rationalisation and festive EMI schemes are additionally anticipated to backing demand, Chitkara stated. LG's Essential Series has noted traction among first-time buyers in Tier-2 and Tier-3 cities.

Sony India Managing Director Sunil Nayyar anticipates value expansion of 15-20% during the festive season, supported by premium products, new launches and consumer offers.

Sony anticipates its imaging business to grow more than 30%, while television demand is anticipated to be fuelled by premium BRAVIA models and larger screen sizes. The firm additionally anticipates firm demand for headphones, soundbars and party speakers.

Godrej Enterprises Group Appliances Division head Kamal Nandi stated the firm saw healthy sales momentum during Onam and anticipates demand to strengthen across other regions during the festive period.

Godrej Appliances has additionally boosted room AC prices from October 1. That stated, consumers could keep get products at pre-hike prices for some time as older inventory stays in the distribution channel.

Nandi stated existing inventory could last for around one to one-and-a-half months, meaning some products may keep be sold at old prices through Diwali before the elevated prices fully take effect.

The festive period from Onam through Dussehra and Diwali typically accounts for around 30-40% of annual sales for appliance manufacturers, according to sector notes.

The Indian consumer durables market is projected to grow 8-10% annually and reach Rs 3-3.25 lakh crore by 2030, according to a joint report by Boston Consulting Group and the Confederation of Indian Industry.