A small price hike by electronic, auto companies is around the corner

Kolkata | New Delhi: Makers of smartphones, electronic products and automobiles are increasing prices slightly over the next fortnight amid rising costs but plan to hold off on further hikes until at least November end to protect demand during the festive season.

Industry executives said the price increases would be smaller than previous hikes-and in some cases the lowest this calendar year-as companies absorb part of the impact of higher commodity prices, freight costs and rupee depreciation.

"We are increasing prices by about 2%, the lowest this year, from September 1 and then hold on to prices till Diwali at least," Haier India chief executive Satish NS said. "This is after absorbing another 3-4% of commodity price and rupee depreciation impact, as so much price hike may disrupt festive demand."


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The caution comes as demand weakens in some categories. Smartphone sales are down 10% from a year earlier after prices rose 35-45%, industry executives said.

India's top three carmakers-Maruti Suzuki, Hyundai Motor India and Tata Motors Passenger Vehicles-are also raising prices ahead of the festive season. Tata Motors is increasing prices by up to ₹25,000 and Hyundai by up to 1%, while Maruti Suzuki raised prices by up to ₹30,000 in August.

Maruti has raised prices twice so far this calendar year while Hyundai and Tata Motors are increasing prices for the third time.

Senior executives at two leading auto companies said there would be no further price revision for the next two to three months.

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Automobile dealers also expect companies to avoid further price hikes during the festive season. Federation of Automobile Dealers Associations vice-president Sai Giridhar said festive momentum had started building and sentiment remained positive. "Any further price increases may affect sentiment. We are not anticipating any further hikes," he said.

Smartphone makers have been raising prices almost every month, while electronics companies have done so roughly every two months. Carmakers have increased prices three times this year.

The West Asia crisis has raised commodity prices and freight rates, while rupee depreciation has added to costs. Memory-chip prices have also risen as supplies are increasingly diverted to AI data centres.

Tata-owned Infiniti Retail chief executive Shibashish Roy said smartphone brands had realised that continuous price increases could hurt demand. The company owns the Croma chain.

"I am not saying there will be zero increase, but they will maintain some kind of a price sanity during the festive season, to ensure that demand doesn't fall down dramatically," Roy said.

He said smartphone brands were also reducing the number of models priced below ₹20,000, allowing higher-priced models to absorb some of the higher costs, especially memory prices.

The month-long peak festive period from Navratri to Diwali accounts for up to 18% of annual car sales and 25-35% of annual sales of smartphones and electronic products.