NEW DELHI: If you have been planning to buy a new smartphone or upgrade to a bigger TV before Diwali, now may not be the best time to go ahead. Prices of mobile phones, laptops, TV sets and printers are set for a second hike in as many months as the dearer rupee has upped costs for companies, forcing them to revise rates just ahead of the crucial festive season,
Companies said the pressure from a depreciating rupee refuses to ease and uncertainty persists over the currency's performance against the dollar in the near future. The rupee has slipped 14.5% against the dollar so far this year and fell to a record low of 65.56 last week.
Coming in the midst of a slowdown, the hike in electronic goods is expected to further dampen sentiment among buyers already shying away from new purchases on account of sluggish growth and high interest rates.
Printer and computer major HP will be hiking prices by as much as 8%, and this revision comes after a similar hike in July. "We have no other option, and will be increasing prices immediately," HP India president (printing and personal systems) Rajiv Srivastava told TOI.
Around half the products HP sells in India are imported, while many of the locally-made ones also contain parts procured from overseas. Srivastava said the effect of increased prices is already telling on the market. "There are certain companies who are trying to reduce, or delay, purchases," he said.
Electronics and mobile phone giant Samsung, which had hiked prices by 2-3% last month to factor in the weaker rupee, is also undertaking a fresh revision in select products. Prices of some of its mobile phones and tablets are up by 3-5% again. "We have been compelled to increase prices of some mobiles and tablets to manage the impact of the sharp rupee depreciation on our input costs," said Vineet Taneja, country head of Samsung's mobile & IT division.
Panasonic, Japanese maker of consumer appliances and televisions, is set to raise prices as well. "Panasonic is keenly observing the rupee movement and the quantum of the price hike will depend on the ( forex) situation which has created an imbalance in the market. It ( rupee fall) might lead to the company increasing prices by 5-7% within a few days if the condition remains the same," said Manish Sharma, MD of Panasonic India.
The company is looking at increased B2B (business-to-business) sales as well as higher local content on products to protect margins.
Sony is mulling a hike between 4% and 6% to factor in higher costs. "The rupee is hitting costs, and we have no option but to increase prices," said Sunil Nayyar, sales head for Sony India. Sony does not manufacture in India and imports all its products here.
Nayyar admitted that the timing of the hike was not good as the market was already under pressure. "There is a slowdown in the industry, though Sony continues to grow."
Companies fear that the fresh round of price hikes will further slow down demand, which is not good news as most have been banking on the upcoming festive season to revive fortunes. "There might be a marginal impact on industry sales due to such measures," Nayyar said.
HP's Srivastava too admitted that the dearer prices were likely to impact the company's overall business.
Rupee plunges again, opens at 65.22 vs US dollar
Now its 65.70 vs US dollar