TV prices stabilising, cos expect 15% fall
Consumer electronics majors LG, Samsung, Haier and Videocon expect prices for LCDs/plasma TVs to fall by only 15% in 2007 compared to the 35-40% levels witnessed during the past 3 years.
KOLKATA: Consumer electronics majors LG, Samsung, Haier and Videocon expect prices for LCDs/plasma TVs to fall by only 15% in calendar 2007 compared to the 35-40% levels witnessed during the past three years.
They will restrict price cuts to maintain margins since consumer demand isn’t as bullish as expected. Interestingly, the players are also drawing up plans to assemble LCDs in India to improve bottomline and enhance inventory control. The electronics industry had pegged to sell some four lakh LCDs/plasma TVs in 2007, but the players feel the slower offtake will lower sales to less than three lakh units.
LG Electronics India’s national head (consumer electronics) Amitabh Tiwari confirmed that the recent trend of plunging LCD TV prices had been partly contained. “There’s been marginal price erosion in February and the next price dip isn’t likely before Diwali. The companies are also investing heavily in ad campaigns to push sales,” he said.
For instance, LG started commercial assembling of LCD/plasma TVs in India on a soft scale, which will hit the markets by June. “Assembling in India will lower costs by about 2% compared to South Korea. But the biggest advantage is proper inventory control since shipments take about 35-40 days,” said Mr Tiwari.
Elaborating, Haier India’s chief operating officer and director Pranay Dhabhai said local assembling in India will ensure better contribution to bottomline. Haier is exploring contract manufacturing options in India.
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“Since shipment takes time, it often happens that by the time inventory reaches India, the global prices for LCD/plasma TV have fallen. As a result, we take a hit. Local production will provide the price advantage,” Mr Dhabhai said. While Videocon intends to assemble LCD/plasma TV in their Kolkata facility, Samsung is sprucing up its capacity in India as well. Samsung claims to enjoy 43% market share with targets to sell two lakh units this year.
Admitting that LCD/plasma TV prices are stabilising, Samsung India deputy MD Ravinder Zutshi told ET, “The current capacity of 1.5 lakh units per annum in our Noida facility will rise to 3.5 lakh units per annum since we will start commercial production in our Chennai facility from August.”
A senior Videocon official said the company will start local assembling from June. “Despite prices stabilising , the market will grow by more than 70% in the coming months. Many new players may also enter this segment which could trigger fresh price wars,” the official said.
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Dealer sources pointed out that several companies are even announcing aggressive plans to push sales through special promotional offers. More so, since TV sales during Cricket World Cup had taken a severe hit due to India’s early exit. “The companies are offering attractive discounts to liquidate old stocks and are launching new models with added features in the same price point,” a Kolkata-based dealer said. Start a SIP with as low as ₹500 with ET Money App!
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