TV manufacturers to hike prices by 7% to offset customs duty impact

Leading TV manufacturers like Sony, LG, Panasonic and Samsung are set to increase prices of their LED/OLED sets by up to 7 per cent to offset impact of increase in customs duty.

Some of them are also expecting a short-term impact on sales and the Consumer Electronics and Appliances Manufacturers Association (CEAMA) has already initiated a dialogue with the government to roll back the duty hike.

Panasonic is going for a hike of 2-7 per cent on its range of LED/OLED TVs.

"The increase in the prices of LED/OLED TVs and thereby, an impact on the consumer demand will be imminent with the proposed custom hike. In line, we will be increasing our prices by 2 per cent to 7 per cent," Panasonic India Business Head Consumer Electronics Division Sales Neeraj Bahl told PTI.

According to industry sources, Samsung is also planning for a hike of around 5-6 per cent.

When asked about the hike, LG Electronics India Managing Director Ki Wan Kim said there is "no way to avoid it."

However, on being asked about the price increase, he said LG is still working on it.

"Internally we would try our best to absorb some of the additional cost through R&D innovation and manufacturing innovations by improving the productivity," said Kim.

Sony India said although prices have not increased and it is currently evaluating the mid and long term impact of the duty.

"Keeping the current situation in mind, it seems likely that we may have to increase the price in the future," said Sony India BRAVIA Business Head Sachin Rai.

According to the CEAMA, the price increase would impact the demand and hit the panel industry in short term, which is facing rough times from last two consecutive years.

"We believe in the short-term, the move will drive inflation and have a setback on consumption as prices may go up to 7 per cent impacting the demand for TVs and further limit the scope of expansion and creation of more job opportunities," said CEAMA President Manish Sharma.

"CEAMA has already initiated a dialogue with the Government of India and the Ministry of Finance, seeking a reversal on the custom duty hike of up to 10 per cent on open cell and other components of the panel," he said.

On being asked whether price hike would impact the prospects of industry, Rai said that the economic indicators and purchase patterns for TV in India reflect a positive picture and considering that there has been consistent growth in the television sector over the years, the current scenario may not severely hamper the overall situation.

"Such short-term dips are likely to be compensated with strong come-back in the mid-long term," he said.

The government raised customs duty on imported panels to 15 per cent from existing the 7.5 per cent in the budget for 2018.

It also increased the customs duty on parts of LCD/LED/OLED TVs to 15 per cent from the existing 10 per cent to boost domestic manufacturing.

"On the flip side, the industry can benefit as it will encourage local manufacturing if looked at through a phased manufacturing programme," the CEAMA said.