Festive shopping to pinch as Iran war sets AC, TV prices on fire

Consumer durables get costlier: Blue Star raises AC prices by 8%, others plan hikes

NEW DELHI: Festive shopping for a new fridge or air-conditioner is set to cost more, with consumer durable makers raising prices as higher component and freight costs, compounded by shipping delays, squeeze margins.Blue Star has raised air-conditioner prices by 8%, managing director B Thiagarajan said. Thomson India plans to raise prices by 10% across categories after Oct, while Intex Technologies is holding off on a broad increase to support festive sales. Haier and Daikin have also raised prices or are preparing to announce increases."Commodity prices have been going up because of war and that has been a big factor," Thiagarajan said.

Demand for copper from electric vehicles and data centres was also contributing to pressure, he added.The latest revisions follow increases ahead of summer. Blue Star had raised prices by 8-10% in mid-Feb, while Daikin announced increases of up to 12% from April, depending on the model. Higher input costs, currency movements and revised energy-efficiency norms were among the reasons cited. For TV and appliance manufacturers, the pressure extends beyond metals.

"The consumer durables industry is facing pressure from both sides - sharply higher input costs and significant supply-chain disruptions," said Thomson India CEO Avneet Singh Marwah.Memory, plastics, metals and open-cell panels have become substantially costlier, alongside freight, he said. Shipments are facing port delays of at least 20-30 days, disrupting inventory planning and production schedules.

Manufacturers have absorbed much of the burden so far, but that is becoming difficult to sustain, Marwah said. "As a result, price corrections across categories such as televisions and appliances are becoming inevitable.

"However, companies are weighing the need to protect margins against the risk of discouraging buyers during the festive season."We are not looking at a broad-based price increase at this stage," said Keshav Bansal, director, Intex Technologies.Bansal said memory-chip costs were weighing on televisions, while commodities, energy, petrochemicals and currency movements were affecting air conditioners and other appliances."Rather than passing this on to consumers, we're absorbing a significant part of these pressures," he said. Intex is using Smart TV bundles, extended panel warranties on select large-screen models, retailer schemes and financing options to encourage upgrades. "Consumers today are willing to spend but are looking more closely at the value they receive," Bansal said.