Even as prices of air-conditioners and other consumer durables rose by 5-8 per cent ahead of the festive season, manufacturers are hoping for a double-digit growth in sales this time. Companies believe that increasing demand for premium products, need to replace old items, easy monthly installments (EMI) and improvement in consumer sentiment will boost sales. This is the third price hike this year. Fluctuations in prices of crude oil-related products, freight charges and currency exchange rates along with rising prices of metals such as copper, aluminum and steel have forced companies to raise prices. Due to good sales during Onam in South India, the industry expects strong demand in the festive season. Companies are confident that sales momentum will continue during Navratri and Diwali as well.

10 to 15 percent increase in sales is likely

Haier Appliances India CEO NS Satish said festive sales will see double-digit growth despite the price hike. He said Haier expects a 30-35 percent growth in festive sales in value terms and around 20 percent growth in volume sales. He believes that the festive season can increase sales by 10 to 15 percent across the industry. Satish said consumer inclination towards premium products is increasing and easy funding is supporting this demand. He said that customers who have already decided to buy the appliance can choose a model with a slightly lower capacity in their budget or buy a premium model through EMI. Haier has hiked room air conditioner prices by around five percent and other categories like LED TVs and washing machines by 2-3 percent from October 1.

Inquiries get good response

LG Electronics India co-head sales and marketing officer Sanjay Chitkara said the company is very optimistic about the upcoming festive season. He said that inquiries about the products during the Shraddha Paksha itself have been encouraging. He said that now the festive occasions are not only limited to shopping, but people also buy appliances during this time to live in a new house or upgrade their existing house. Besides refrigerators, washing machines, TVs and air-conditioners, demand is also increasing in categories such as dishwashers, microwaves, audio products and water purifiers.

Demand for premium products will increase

Sony India managing director Sunil Nair expects the company’s total sales to increase by 15-20 percent in value during the festive season. He said premium products, new models and attractive offers are encouraging consumers to buy. Sony expects its imaging business to grow by more than 30 percent. Demand for premium Bravia models and large screen size TVs could play a major role in the television business. Sales of headphones, soundbars and party speakers in the audio category are also expected to remain strong due to new products and festive offers.

Old price stock is also available

Kamal Nandi, Head, Appliances Division, Godrej Enterprise Group, said the festive season is an important time for purchases of refrigerators, washing machines and air-conditioners. He said that the pace of sales during Onam was good and now the demand is expected to pick up in other areas as well. Although companies have hiked prices, consumers may get a chance to buy products at old prices for some time. This is because distributors and dealers bought enough goods and stocked them before the price hike.

According to Godrej, stocks bought at old prices can remain available in the market for about one to one-and-a-half months. In such a situation, there is a possibility that old price products will be available till Diwali. After this, the impact of the new prices will be more pronounced in the market. Generally, the festive season from Onam to Dussehra and Diwali contributes about 30-40 percent to the annual sales of consumer appliance companies.

BCG-CII Report

According to a joint report by Boston Consulting Group (BCG) and Confederation of Indian Industry (CII), India’s consumer durable goods market by 2030 will reach Rs. 3-3.25 lakh crore, which will grow at the rate of 8-10 percent annually. Overall, despite the increase in prices, companies expect demand for premium products, intention to replace old equipment and easy EMI facilities to keep sales strong during the festive season.