Costly Diwali: Appliance makers set to serve up another price shock

Kolkata: Air-conditioners, televisions, refrigerators and washing machines are set to get dearer just ahead of Diwali with leading manufacturers including LG, Daikin, Samsung, Voltas, Bosch, Havells and Godrej informing trade partners of price increases of up to 10% from October 1, citing a sharp rise in input costs.

The latest increase will be the third this year, taking cumulative price hikes across several categories up to 16-18% since January. This has prompted some companies to turn cautious about the pace of sales growth in the second half of the fiscal, including during the crucial festive season.

Also Read: India’s consumer durables boom has a Rs 50,000 crore localisation opportunity: Report


LG Electronics India, the country's largest consumer electronics maker, said in a September 24 communication to trade partners that the cost of key inputs had risen sharply this year, with copper up 34%, resin 17%, steel 24% and aluminium 16%, apart from higher logistics and energy costs and adverse foreign-exchange movements.

"Despite absorbing these pressures to the extent possible, the prevailing increased cost environment necessitates price revision," the company's co-chief sales and marketing officer Sanjay Chitkara wrote in the letter. "These revisions are implemented after careful internal assessment and are essential to ensure continued product quality, supply stability and long-term sustainability of operations," he wrote.

LG will raise prices of air-conditioners, televisions and home appliances by 5-7% from October 1. Tata-owned Voltas has communicated a 5-7% increase in AC prices, while Daikin India is raising prices by 6-10%. Godrej has communicated a 4-6% increase, Havells around 5%, while Bosch Home Comfort has also informed the trade of upward revision of prices. Samsung has already raised television prices across its 43-inch to 75-inch range by ₹1,000-10,000.

ET has reviewed all these official communications to the trade.

Daikin India managing director KJ Jawa said the unprecedented pressure on input costs and supply chains was leaving manufacturers with little room to absorb further increases.

"Copper prices have shot through the roof, appreciating by 35% year-on-year. Demand is likely to become subdued now compared with the 25-30% growth the industry had reported in the April-June quarter," he said.

The industry had earlier wanted to limit pre-Diwali increases to around 2-3% to avoid hurting festive demand. LG management had also told analysts in August that it would initially seek to manage further cost pressures through cost management and sourcing efficiencies rather than raise prices again.

Also Read: Fewer Indians plan to raise festive budgets in 2026, but high spenders grow: Survey

However, the prolonged West Asia crisis and renewed raw-material inflation have forced companies to reassess that strategy. Copper prices have risen about 10% in the past three months, aluminium 5%, steel around 13% and resin 18%, adding to manufacturing costs.

The price increases come just ahead of the country's biggest consumption window, spanning Navratri and Diwali, when sales of consumer electronics and appliances typically peak and account for an estimated 25-30% of annual offtake.