Electronic goods set to get expensive amid short supplies from virus hit China.

Consumer electronics retailers are planning to increase the prices of refrigerators, air conditioners, microwave ovens and washing machines in March due to higher product costs amid short supplies from coronavirus-hit China.

All major manufacturers including LG, Voltas, Samsung, Haier and Panasonic have decided to increase prices across models by 3-5 per cent. That means an Rs 3,000-4,000 price hike for affordable and large capacity models.

"Due to lower demand in China, component prices have risen, and shipping costs are rising too. The budget also raised tariffs on certain products by 2.5%. Keeping these into account, we are passing on some of it, "said Pradeep Bakshi, Voltas managing director. His company is the largest manufacturer of AC in India.

The budget increased the import duty on compressors for refrigerators and air conditioners from 10% to 12.5%. The import tax on motors used in washing machines and other goods has risen from 7.5% to 10%.

Sales executives at India’s two largest appliances makers, LG and Samsung, have informed key trade partners of a 3-4% price hike for microwave ovens and washing machines from next week. Prices of refrigerators and ACs will be increased after that.

LG and Samsung did not respond to an email seeking comment till press time Wednesday.

Voltas, owned by the Tata Group, would hike AC rates by 3 percent from March and Bakshi said in May he will review the situation again. Panasonic is planning a similar hike for ACs but is tracking other items in the case. Haier would raise prices for AC and refrigerator by up to 2.5-5%.

Eric Braganza, president of Haier Appliances India, said product factories in China were working at around half their capacity. "There is still not much certainty when suppliers of materials are going to normalise," he added.

Last week, these firms had decided to raise television rates by 7-10 percent from March due to a 15-20 percent spike in the main component, the LED TV screen. At the moment, only Daikin had announced also a price hike for ACs.

According to a recent report from ICICI Securities, the Indian electronics industry is considering a few alternate locations for product sourcing, such as Thailand, Malaysia and Vietnam. But this, combined with higher air freight costs to shorten lead time, would inflate part and finished product cost by 5-6 per cent that would be passed on to consumers, the study said.