Cos bullish on ACs & fridges, TV sales may stay sluggish

WITH consumer durables production growth rate plummeting to a meager 1.6% during February 2007, an ominous sign of an impending slowdown, one would expect marketers to be a worried lot, right? Not really, for the tone and tenor of leading marketers in the Rs 25,000-crore industry does not betray any nervousness on either demand slowdown or major revamping of their summer sales strategies. Holding the price line, despite input costs going up, most big durable makers such as LG, Samsung, Mirc Electronics and Haier expect no major downfall in sales during the next three months. Apart form colour televisions, which are already witnessing growth tardiness for the past month or so, air-conditioners and refrigerators are expected to grow handsomely, 45% and 15% respectively over last year, according to general consensus in the industry. “We are not revising our sales targets despite all the concerns, as no slowdown in terms of sales is expected. The buoyancy in the economy would have had a stronger impact on the sales and growth of the industry had it not been for the pressure of interest costs,” says Samsung India deputy MD Ravinder Zutshi. The Korean chaebol is expecting its ACs and refrigerator range to grow at 50% and 18%, respectively, in 2007 over last year. “If the interest rates are hiked further by consumer finance companies, we would need to subsidise the interest costs to a greater extent so that the consumer does not have to take the full brunt of the hike,” adds Mr Zutshi. With just 15% of all durable purchase financed, there is only a marginal impact on demand due to rising interest rates. LG India too seems bullish about sales in the current quarter (April-June) with expectations of an over 20% growth in ACs and 10-15% growth for refrigerators. “We are not getting back to any (freekind) promotion. Our sales will come in from the pull created by new products along with a robust supply and distribution chain,” says LG India VP, sales & marketing Girish Rao. The company, though is re-launching its exchange programme, LG First — launched with much fanfare around January and discontinued shortly — for the summer months with a renewed tie-up with its dealers. “There has been a slowdown in CTV sales but both ACs and refrigerators are expected to grow. The marriage season in the North will also help push the sales,” says Mirc Electronics VP, marketing & sales Vivek Sharma.

Courtesy: EconomicTimes