ACs, refrigerators set to get dearer this summer

Air conditioners and refrigerators are set to get dearer this summer. Escalating input costs and lack of relief from the Budget have prompted durable companies to hike prices from next month.

Korean firm Samsung Electronics has already increased the prices of refrigerator by 2-3 per cent, which will be reflected in the new models introduced later this month. Market leader LG Electronics and Appliances, Godrej Appliances have also hinted to increase the prices by 3-5 per cent.

The move is due to rise in the commodity prices in the last three months. Both public and private sector steel companies have increased prices for flat products, mainly used in consumer durables and automobiles, from Rs 2,500 - 3,000 per tonne. The domestic steel prices have jumped by 15 per cent, since January with a likelihood of further surge in April.

Kamal Nandi, V-P (sales and marketing), Godrej Appliances, said, "The refrigerators, air conditioners and washing machines will surge 3-5 per cent. It is not possible to pass on entire 8 per cent cost escalation, but companies can no longer absorb input cost pressures."

According to Nandi, Godrej has priced Edge, its new range of direct cool refrigertors, at 3-5 per cent premium due to the new technological features.

This would be the second round of hiking prices, as the companies had increased television prices in December. The extended winter and the stock market chill is also dragging demand for cooling appliances.

Amitabh Tiwari, Kitchen Appliances, (business head), LG Electronics, said, " The longer winter has cast a spell on refrigerator market, which is down by 30 per cent. The trade also does not seem to be very

confident but hopefully the market will pick up by begining of April."

Meanwhile, individual dealers revealed that customers are holding or deferring purchases in anticipation of price cuts after the Budget.

But companies have expressed disatisfaction on the 2 per cent excise duty cut as it will not offset rising input costs. The industry was expecting rationalisation of excise duty upto 12 per cent.

" We will have to see what is the effective price rise as consumer schemes may absorb the extra costs," said a Mumbai-based dealer.