Cheery 2006 predicted for consumer durables sector

Leading consumer durables players and experts predict a 10-12 per cent growth for the sector in 2006. Their confidence stems from the fact that calendar year 2005 saw a growth of 8-10 per cent in the Rs 21,000-crore sector, driven by high-end categories.

"We expect 10 per cent growth for colour TVs, over 20 per cent for both air conditioners and microwave ovens, 3-5 per cent for refrigerators and 8-10 per cent for washing machines," said Suresh Khanna, secretary-general, Consumer Electronics and TV Manufacturers' Association.

Retail consultancy KSA Technopak expects a 12 per cent growth for the consumer durables market. Opportunities for the sector lie in smaller markets and in tapping the urban poor.

However, companies would have to offer product innovations while trying to reach out to different consumers, said Harminder Sahni, principal consultant, KSA Technopak.

This will also be the year Indian consumer durable majors Videocon and Onida will compete better against the South Korean "chaebols", having enhanced their product range in both consumer electronics and home appliances, felt Rajeev Karwal, chairman, consumer durables division, Confederation of Indian Industry.

Although leading players say there will not be any significant price drop with prices stabilising and maximum erosions having taken place, an industry source said the plasma display panel (PDP) and LCD TV categories would see at least 10 per cent price erosion. PDP prices were expected to come closer to Rs 1 lakh from the current Rs 1.5 lakh, he added.

LG is targeting a turnover of Rs 9,000 crore this year, after a turnover of Rs 7,500 crore in 2005. Key growth drivers for the company would be information technology and GSM where it is targeting a sale of 1.5 million GSM handsets, up from last year's 0.5 million units, said Girish V Rao, vice-president, sales, LG. The company is also expecting a 100 per cent growth in flat TV sales.

While refusing to divulge its plans so soon, Samsung's Deputy Managing Director Ravinder Zutshi said the company was expecting its flat display panels to contribute four per cent in 2006, compared with 1 per cent last year. The soccer World Cup in 2006 is expected to brighten the prospects of the CTV industry in certain states like West Bengal and Goa.

New product launches are being lined up, especially in the flat TV, LCD TV and plasma display categories. While Videocon would launch its 32-inch LCD TV in March this year and a 42-inch plasma by Diwali, it was targeting better sales in the 29-inch flat TV category which contributed 13 per cent to sales, said Sunil Mehta, vice-president, sales, consumer electronics, Videocon International.

Onida already had the largest flat TV range, having recently launched four new 21-inch flat TV models and two 29-inch flat TV models, said Vivek Sharma, vice-president, marketing, Onida. The focus this year would be on marketing these products, he added.

The company will also launch a revamped AC range soon. Voltas would spend 30-40 per cent more on its marketing initiatives and also refurbish its after-sales network, said Rajesh Jain, GM, marketing.