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More heat for Indian consumers as ACs set to get 3-4% costlier
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SME Times News Bureau | 13 May, 2022
Hit
by multiple factors such as rising fuel costs and global component
shortages, Indian AC manufacturers said on Friday that they have no
alternative but to pass off the burden to the consumers who will have to
pay at least three to four per cent more on ACs next month.
The
Indian consumer electronics industry continues to face raw material
shortage during the ongoing China-lockdowns and the Russia-Ukraine war.
"The
rise in cost of raw materials due to an increase in fuel prices along
with component shortage, commodity price inflation, disruption in supply
chain, and higher demand for air conditioning solutions for both B2B
and B2C spaces is pushing brands to increase prices of the products,"
said Gurmeet Singh, Chairman and Managing Director, Johnson
Controls-Hitachi Air Conditioning India Ltd.
"Consumers can expect a 3 to 4 per cent rise in air conditioner prices in June," he said in a statement.
The electronics sector has already been raising prices by 2-3 per cent every quarter owing to the Covid-19 pandemic.
With
supply chain disruptions, fast-moving consumer goods (FMCG) companies
have also been forced to increase the prices of daily-use products.
Lockdowns in China have delayed shipments across industries and consumer electronics has taken the maximum hit.
According
to Avneet Singh Marwah, CEO of Super Plastronics Pvt. Ltd (SPPL), since
the beginning of the year, there have been lots of challenges like the
Russia-Ukraine war, Covid situation, lockdown in China and now the
Indian rupee falling to an all-time low against the US dollar.
"All
this has pushed the brands to struggle in sourcing, production and
supply. As a result, there has been an increase of 20 per cent in raw
material and commodity prices. Thomson as a brand will increase product
prices in June and July by 3-5 per cent," Marwah told IANS.
Experts are worried that the ongoing crisis can even spill over to the festive sales season.
"With
the pent-up demand for air conditioners both for B2B and B2C segments
along with long summer and monsoon seasons, the demand for air
conditioners is not expected to be adversely affected," said Singh.
The
government's focus on encouraging domestic manufacturing by introducing
PLI schemes and other such initiatives is expected to improve the
industry and ecosystem scenario in the future which would ultimately
benefit the consumers, said the industry leaders.
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