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Rupee depreciation and input cost-linked inflation have dampened sales in the consumer durables industry this Christmas.
“Rupee depreciation has forced us to look at price changes. At the same time, demand has not picked up, driven mainly by inflation,” said Mr Shantanu Das Gupta, Vice-President (Corporate Affairs & Strategy - South Asia), Whirlpool.
Videocon was forced to hike prices by 6-7 per cent in November. Its competitors Whirlpool and Godrej, too, have increased the prices of refrigerators and washing machines by 2-3 per cent and 3-5 per cent, respectively. Samsung has revised the prices of home appliances twice this year, by around 2 per cent in the middle of 2011, linked with input cost increases, and then again by 3-5 per cent in the third week of November linked to the rupee depreciation.
Sony, meanwhile, has been absorbing costs, having not once hiked its prices this year. The company, however, indicated a possible price correction if the rupee continues to depreciate. The company imports all its products, its localisation levels being zero.
Mr Anirudh Dhoot, Director, Videocon, said, “During Christmas and New Year, sales in South India usually pick up. In fact, South India accounts for 28-29 per cent of the entire consumer durables industry. On the whole, we are expecting 14-15 per cent incremental sales during December, the bulk from the South. Having said that, this festive season has not been good. During Diwali we were expecting 17-18 per cent growth; however, only 8-9 per cent was realised. During the entire period of January-December, 15 per cent growth was projected and only 9-10 per cent has been realised so far.”
Confirming the trend of the South faring better than the North this Christmas, Mr Mahesh Krishnan, VP-Home Appliances, Samsung India said, “Sales in Tamil Nadu and Kerala are showing a better uptake linked with New Year and Christmas sales this month.” The company, however, refused to divulge sales numbers and the hike in its import payables as a result of rupee depreciation.
The depreciating rupee has inflated Videocon's import payables by 7-8 per cent. “We mainly import high-end critical components for LCDs and LEDs which contribute 30-35 per cent to our consolidated revenue,” Mr Dhoot said.
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