This festive season, the cost of white goods like refrigerators, washing machines and air-conditioners will go up by five per cent as almost all manufacturers have decided to rewrite their price tags after almost two years.

"The input costs are related to direct material cost, which have gone up by almost 20 per cent over the last few months. The prices of our products will go up by three-to-five per cent. The revision in prices is driven primarily by the increase in input costs of steel and few other commodities," said Ajay Kapila, head (sales and marketing), ElectroluxKelvinator Ltd.

The consumer durables industry had been shying away from hiking prices due to the intense competition and quest for greater marketshare. Thus, while the volumes in the refrigerator industry grew by about 8 per cent, the value of the sales showed a decline of one per cent.

According to Soumitra Ghatak, vice-president (marketing), Godrej Home Appliances, the adjustment was long overdue as the current pricing was totally unsustainable on the face of drastic increases in the prices of steel, copper, plastic and compressors.

"MNCs that are currently market leaders in white goods were challengers a few years back and they resorted to aggressive pricing to gain numbers. Now when their volumes have increased substantially, they are finding their old strategy unviable," he explained.

Ghatak added that Godrej's products are already priced higher than most of the competitors but they may go up by two per cent soon.

Several other white good makers like Samsung, Whirlpool and Voltas said that prices across all product categories will go up by 3-5 per cent before the festive season sales start picking up.

"We have no other option but to pass the cost increase to the consumer. We will make an announcement sometime next month," said Ravinder Zutshi, vice-president (sales), Samsung India. Earlier this month, Voltas had increased prices on its one tonne air-conditioner models by three per cent and its 1.5 tonne ACs by four per cent.

"For refrigerators there will not be any direct price hike, but there will be no festive offers or discounts this season," said KJ Jawa, vice-president (sales), Voltas.

Festive surprise

• The cost of white goods like refrigerators, washing machines and air-conditioners will go up by five per cent as almost all manufacturers have decided to rewrite their price tags after almost two years
• The consumer durables industry had been shying away from hiking prices due to intense competition and quest for greater marketshare
• Earlier this month, Voltas had increased prices on its one tonne  air-conditioner models by three per cent and its 1.5 tonne ACs by four per cent