This new year, ring in the new... price range! That's a whammy awaiting Indian consumers, as price hikes are on the anvil for electronics, home appliances, homeware, cars and bikes. Do not be surprised if more categories join, considering how margins and operating costs have been in a tight squeeze post the coronavirus outbreak.
Prices of TV, AC, refrigerators and washing machines are set to go up, with brands like LG, Panasonic and Thomson announcing price hikes from January. Sony is reviewing the situation and could announce a similar hike soon. “We are planning to increase prices in the fourth quarter (January-to-March quarter),” Pioneer India managing director Hideaki Ishii told THE WEEK.
Almost all leading automobile makers have also confirmed that they are going for a price hike in the new year. This includes market leader Maruti Suzuki, Honda, MG Motor, Renault, Nissan, Ford and Mahindra & Mahindra. Two-wheeler market leader Hero has also announced it will increase prices by up to Rs 1,500 come new year day.
The reason cited by all is the increase in manufacturing cost and rising cost of components and raw materials. Steel prices, for example, went up four times just in December. So have prices of items like copper, aluminium and even plastic. Import costs have also gone up, and not just due to tensions with China from where a lot of the commodities come from. Farmer protests have also disrupted supply chains in recent weeks, mainly in north India.
Tata Motors added impact of foreign exchange rate fluctuation, as well as the transition to BS6 earlier in 2020 as a reason. Tata is hiking prices across its commercial vehicle range from January 1.
“Prices are going to be appraised and consumers should be ready to pay more,” said Gurmeet Singh, chairman and managing director, Johnson Controls-Hitachi. “Manufacturers are having to absorb the costs or increase prices as per their capacity.”
“With price of many types of plastics increasing by 3 times and international freight rising by 5 times, the pressure on the selling price is inevitable.The cost of raw materials such as aluminium has also increased significantly, compelling brands to increase the price,” Ravi Saxena, managing director of leading homeware brand Wonderchef told THE WEEK.
“Yes, there will be certainly some percentage change,” admits Vijay Mikkilineni, senior marketing manager of TCL India, a popular TV manufacturer. Panasonic India president & CEO Manish Sharma was quoted by PTI that he anticipated “price to go up by 6-7 per cent in January itself and may go up to 10-11 per cent (later).”
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Most of the companies have not yet specified the exact increase, but indications are that it could be across-the-board. Renault India, which sells car models like Qwid and Duster has said the price rise will be up to Rs 28,000 per car. MG Motors’ price hike will be up to 3 per cent, Volkswagen's expected to start at 2.5 per cent, while Nissan's should be up to 3 per cent. The hike will also apply to Nissan's just-launched SUV Magnite, which is on an introductory price offer till the end of 2020 anyway. Honda has reportedly told dealers that they will be intimated with the exact increase in price points only in January.
“The indication from the brands are that prices will go up by 7-10 per cent in the second week of January, as all input cost of materials and the cost of transportation is going to increase from January,” said Nilesh Gupta, director, Vijay Sales, one of the biggest electronics and home appliance retail chains in the country.
