Price hike by electronic, auto cos soon

Kolkata and New Delhi: Electronic product and automobile manufacturers are set to raise prices slightly over the next two weeks due to escalating costs. However, they intend to refrain from further price hikes until at least the end of November to maintain demand during the festive season. Industry insiders disclosed that the price increases will be modest compared to past hikes and could be the lowest of the year, as companies absorb part of the impact from higher commodity prices, freight costs, and currency depreciation.

Haier India's CEO, Satish NS, announced a 2% price increase, effective from September 1, with prices remaining unchanged until Diwali.

The cautionary measure comes as certain categories witness a decline in demand. Smartphone sales have dropped by 10% compared to the previous year, with prices soaring by 35-45%. Leading domestic automakers, including Maruti Suzuki, Hyundai Motor India, and Tata Motors Passenger Vehicles, are also preparing to hike prices before the festive season.

Maruti Suzuki increased prices by up to ₹30,000 in August, while Tata Motors raised them by up to ₹25,000 and Hyundai by up to 1%. The automakers have raised prices for the third time this calendar year.

Senior executives from two prominent automobile companies stated that there will be no additional price revisions for the next two to three months. Federation of Automobile Dealers Associations vice-president, Sai Giridhar, expressed optimism regarding the festive momentum and positive sentiment. He cautioned against any further price hikes during this period, as they might negatively impact sentiment.

Smartphone manufacturers have been raising prices almost monthly, while electronics companies have done so roughly every two months. Carmakers, on the other hand, have increased prices three times this year.

The ongoing crisis in the Middle East has contributed to the rise in commodity prices and freight rates, while the depreciating rupee has added to the overall costs. Memory-chip prices have also surged due to the increasing diversion of supplies towards AI data centers. Shibashish Roy, Tata-owned Infiniti Retail's CEO, acknowledged that continuous price hikes could potentially harm demand.

He emphasized that smartphone brands would maintain reasonable pricing during the festive season to prevent a significant drop in demand. Roy also mentioned that smartphone brands are reducing the number of models priced below ₹20,000, allowing higher-priced models to absorb some of the higher costs, particularly memory prices. The festive period, which spans from Navratri to Diwali, accounts for up to 18% of annual car sales and 25-35% of annual smartphone and electronic product sales.