Prices of refrigerators are set to go up by about 5 per cent yet again, thanks to spiralling steel prices. Leading firms like LG, Samsung, Whirlpool and Godrej are all in the process of increasing refrigerator prices across the board.
This is the 4th time prices of refrigerators have been hiked in the past one year, owing to rising costs of either steel, plastic or fuel. Industry representatives maintained that the increase in consumer prices would hurt category growth of refrigerators, already under pressure. In fact, among all consumer goods put together, refrigerators and washing machines are among the slowest growing categories, compared to CTVs, PCs and mobile phones.
The latest hike in steel prices is primarily impacting refrigerators prices because the steel component in a fridge is as much as 40 per cent .
Said Anil Arora, LG's product head, refrigerators, "With peak season for fridges only some months away, this price hike will negatively impact consumer buying, specially in the mid- and entry-level segments."
Arvind Mediratta, VP marketing, Whirlpool, said a price hike was imminent, primarily for fridges, and possibly for washing machines as well. "We have to consider profitability," he added.
Said R Zutshi, director, Samsung, "We have no choice. Prices of frost-free fridges are being increased by about 5 per cent , and our direct cool fridges will be costlier by 3 per cent ."
The fridge market is India is estimated at roughly 4.5-million units, 75 per cent of which is accounted for by the direct cool category. While the frost-free category grew 23 per cent last year, direct cool fridges growth went down 3-4 per cent . Penetration of refrigerators has not even reached double digits in India.
According to SK Ghatak, Executive VP, Godrej Appliances, despite the price hike, dealers are offering desperate deals to consumers to move stocks.
From Times Of India