Auto makers to follow suit with the decline in rupee hitting most sectors
Even though prices of consumer durables, including mobile phones, laptops and cameras, have increased in the range of 3 per cent to 10 per cent over the past week, the continuous decline in rupee’s value has forced players to mull another round of price hike to offset its impact.
The depreciation in rupee, which had touched a lifetime low of 68.85 on August 28, has weakened over 20 per cent against the dollar since April 1, putting more pressure of costs of the companies.
Japanese consumer durable major Panasonic said if the situation does not get better it will increase prices of its products by 5-7 per cent.
“Panasonic is keenly observing the rupee movement and the quantum of price hike will depend on the situation which has created an imbalance in the market. It might lead to the company increasing prices by 5-7 per cent with a few days if the condition remains the same,” Panasonic India Managing Director Manish Sharma said.
Korean electronic giant Samsung has already increased the prices of select mobiles and tablets by 3-5 per cent and is “considering a price increase for our consumer electronics products as well,” Samsung India Consumer Electronics Business Sr VP Atul Jain said.
Likewise, Canon India Executive Vice President Alok Bharadwaj told The Hindu, “In the last 90 days, since April, rupee has fallen nearly 22 per cent. We are left with no option but to pass the cost to consumers. When the rupee was in the 55-60 range we had increased prices for B2B segment by 5 per cent. Now the currency is crossed 68, we will be increasing the prices of our digital SLRs as well by 6 per cent.”
PC maker HP said while some prices have already been adjusted, “the company regularly reviews pricing for all its products…Price adjustments, if made, will vary by SKU, with an estimated 6 to 10 per cent average increase.” Similarly, television and monitor make AOC said the company observed the price stratum for 2 months but now will have to go with the price increase.
“We have already increased the prices by average 10 per cent. We are now budgeted for fluctuations in the range of 65-70. However, we’ll need to go for another price hike if rupee crosses the 70-level mark,” Vishal Sehgal, Co-founder and Director if Lava Mobile told The Hindu.
In the automobile sector, while manufacturers like General Motors and Mercedes-Benz have already hiked prices of their models, German car maker Volkswagen is also considering increasing the prices of its products.
"The rupee depreciation is impacting our margins very heavily. We have to increase our prices soon. We are currently working out the quantum of it and we might take a final call around September 10," Volkswagen Group Sales India Pvt Ltd, Managing Director (Volkswagen passenger cars) Arvind Saxena said.
Meanwhile, R Sethuraman, Director (Finance and Corporate Affairs), Hyundai Motor India Ltd said, “The continued depreciation of the rupee going forward is not conducive for the automobile market, as this will again lead to an increase in fuel prices and input costs… Any increase of input costs may lead to a further drop in already stagnating demand. Compounded with the depressed market conditions, margins also will be under squeeze in the medium term.”