National

White goods will become dearer

NEW DELHI: Already hit by rising prices of food and essential commodities, consumers would now have to pay more for white goods and motor vehicles. All leading consumer electronics companies have decided to raise the prices of their products by 2-5 per cent, while leading car manufacturers are also likely to announce a hike in their prices soon.

The first round of price hike of 2-3 per cent in white goods, which went unnoticed due to off-peak season, was effected in January-February. But increase in input costs and immense pressure on margins is forcing these companies to hike prices again. This time it could be in the range of 2-5 per cent. Some white goods companies have increased their prices before launching their products this summer.

All leading consumer electronics companies, including LG, Samsung, Electrolux, Whirlpool, Godrej, Carrier and Videocon, might increase the prices of refrigerators, air-conditioners and washing machines by the end of April or May. This might affect their sales during summer when they register maximum sales.

“Due to rising input costs and increase in the prices of steel and plastics, we had to increase the prices of our products by 2-3 per cent in January-February this year. But the cost pressure had failed to subside even after that. As a result, we have no option but to increase the prices by another 2-3 per cent, which is being done in a phased manner between April and June this year,” Whirlpool India Managing Director Arvind Uppal told The Hindu.

Mr. Uppal said that as consumers were already hit by high prices of essential items, they might not have enough money to buy white goods and luxury items. “It is still to be seen how the sales of white goods get affected due to the pressure of inflation. Though the Government has announced some measures, it will take some time before its effect are felt,” he added. Steel prices have risen by almost 50 per cent last year.

The automobile industry is also planning a hike in car prices, despite the sops announced by Finance Minister P. Chidambaram in his budget. All leading car manufacturers, including Maruti Suzuki, Hyundai, Honda, General Motors, Tata Motors and Mahindra & Mahindra are finding it difficult to cope with rising commodity prices and input costs.

“It is not just the prices of steel, aluminium or plastics that have registered a steep rise in prices over the past few months, other costs including that of transportation are on the rise. Till now we have been trying to manage this internally, but now the time has come to pass some portion of it to consumers. It is the overall cost of business that has gone up and we have no option but effect a price rise,” said a senior Maruti Suzuki official.

Citing high steel prices and other input costs, almost all automobile companies, including Maruti Suzuki, Honda, Hyundai and Skoda had raised car prices by Rs. 5,000-30,000 in January-February this year. However, after Mr. Chidambaram announced a cut in excise duty on cars and two-wheelers, automobile companies responded by announcing price cuts in the range of Rs.10,000-50,000.

But now the benefits of excise cuts passed on to the consumers will be taken back. The price rise that could come into effect by the end of this month or in early May could be in the range of 5-10 per cent. Similarly, two-wheeler prices are also all set to go up. The auto industry badly affected due to high interest rates of auto loans, increasing costs and lower margins might have to face another slowdown.

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