Festive demand stays strong: Appliance makers eye double-digit sales despite price hikes

The latest price hike comes ahead of the peak festive season.

NEW DELHI: Consumer durable manufacturers are expecting double-digit sales growth during the festive season despite a 5-8% increase in prices of air-conditioners and other appliances, with premiumisation, replacement demand, easy financing and improving consumer sentiment likely to support demand.The latest price hike, the third round of revisions this year, comes ahead of the peak festive season. Rising costs of copper, aluminium, steel and crude derivatives, along with higher freight expenses and currency fluctuations, have prompted manufacturers to raise prices.The industry began the festive season on a positive note with strong sales during Onam in southern markets and expects the momentum to continue through Navratri and Diwali.Consumers are increasingly opting for larger-capacity and feature-rich appliances, including energy-efficient and smart-connected products. This shift towards premium products is expected to support value growth even as higher prices put some pressure on volumes, industry executives said.Some manufacturers expect the impact of the price hikes to be limited as dealers and distributors had already stocked products at older prices through pre-buying schemes in August and September.Haier Appliances India CEO N S Satish said the company expects strong festive demand despite the price increases. “Definitely. It will,” Satish told PTI when asked whether the industry would record double-digit growth despite the price hikes.“For us, it will be 30-35 per cent growth. Industry should be about 10-15 per cent,” he added.Haier expects festive sales to grow 30-35% by value, while unit sales are likely to increase around 20%, Satish said. He attributed the expected growth to premiumisation and easy availability of consumer finance.According to Satish, consumers who have already decided to buy an appliance are likely to either choose a slightly lower-capacity product within their budget or use EMI financing to upgrade to a premium model.“The premiumisation story is happening and with the availability of easy finance… we will enable the affordability and premiumisation upgradation story,” he said.Haier raised prices of room air-conditioners by around 5% from October 1 and increased prices by 2-3% in categories such as LED TVs and washing machines.LG Electronics India Co-Chief Sales & Marketing Officer Sanjay Chitkara said the company is “very optimistic” about the upcoming festive season, which begins with Navratri in the second weekend of October.Apart from refrigerators, washing machines, televisions and air-conditioners, consumers are also exploring categories such as dishwashers, microwave ovens, audio products and water purifiers, he said.Improved affordability following GST rationalisation and special festive EMI schemes are expected to support demand. LG’s Essential Series is also seeing traction among first-time consumers in Tier-2 and Tier-3 markets, Chitkara said.Sony India Managing Director Sunil Nayyar expects overall value growth of around 15-20% during the festive season. “We are expecting a strong festive season this year, with overall value growth of around 15 to 20 per cent,” Nayyar said, adding that premium products, new launches and consumer offers are supporting demand.Sony expects more than 30% growth in its imaging business, while television sales are expected to be driven by premium BRAVIA models and larger screen sizes.The company also expects strong growth in audio products, particularly headphones, soundbars and party speakers, supported by new launches and festive offers.Godrej Enterprises Group Appliances Division head Kamal Nandi said the festive period remains an important purchase window for refrigerators, washing machines and air-conditioners.“Despite the inflationary environment, we witnessed sales momentum during Onam, and we are optimistic about the festive demand to pick up across other regions as well,” Nandi said.Godrej Appliances raised prices of room air-conditioners from October 1. Nandi said consumers could still buy some products at existing prices during the festive season because inventory purchased before the hikes remains available with distributors.“There are pipelines which will last for about a month to one-and-a-half months. Diwali should largely get covered with old-price inventory. Post-Diwali, the new prices will certainly take effect,” Nandi had said earlier.The festive period from Onam through Dussehra and Diwali typically accounts for 30-40% of annual sales for appliance manufacturers, according to sector reports. The Indian consumer durables market is expected to grow 8-10% annually to reach Rs 3-3.25 lakh crore by 2030, according to a joint report by Boston Consulting Group (BCG) and Confederation of Indian Industry (CII).