Financial Express
 May 19, 2006 

India's largest consumer durables company LG and other industry majors like Hyundai and Mirc Electronics on Thursday announced a hike of 4-7% in prices of ACs, refrigerators and washing machines effective June 1.

• LG, Hyundai, Mirc Electronics have announced hike of 4-7% in prices of ACs, refrigerators and washing machines effective June 1.

• Samsung had increased prices of ACs, refrigerators by 4% last month.

The second-largest company in the industry, Samsung Electronics, had increased prices of ACs and refrigerators by 4% last month. Rise in input costs of metals, oil and plastics has led to the hike, companies said.
 
LG Electronics has increased AC prices by 4%, refrigerators (5-7%), washing machines (6%), microwave ovens (4-5%). "The peak season (April-May) is going to be over. Overall, cost of raw materials has risen 20-25%. Steel, aluminium and copper prices have shot up 25%, 40% and 100%, respectively forcing us to hike prices," Girish Rao, vice-president, marketing, LG, explained. "We had announced a 4% price rise in our compressor products (ACs and refrigerators) in April. We don't plan to hike it any further," Ravinder Zutshi, deputy MD of Samsung India said. Most companies are hiking prices from June 1 onwards. Hyundai India has decided to raise AC prices by Rs 1,000 with effect from June 1. Hyundai one tonne will now cost Rs 16,500, 1.5 tonne (Rs 23,500), two tonne (Rs 26,000) and 4 tonne Cassette AC (Rs 95,000). Mirc Electronics vice-president, Vivek Sharma said, "There is a possibility that we, too, may hike prices of appliances to include ACs and washing machines by an additional 4-5% from the first week of June."
 
However, appliances division of Godrej & Boyce Manufacturing Company is looking at hiking prices of its appliances across categories only after the season is over. According to its general manager (marketing), Kamal Nandi, "We will not hike prices of Godrej' appliances in the season, but post-season we will definitely hike prices." Input prices of raw materials have dramatically increased in the past few months. Prices of copper have doubled from $4,800 per met tonne in Q1 CY06 to $8,610 in Q2 CY06. Aluminium prices have shot up from $2400/mt in Q1 to $3300/mt in Q2. Oil prices have shot up from $60 to $70 per barrel resulting in increased plastic price to Rs 70/kg. According to latest ORG-GFK survey, LG leads the refrigerator segment with a 29.9% market share followed by Whirlpool (24.1%) and Godrej (13.4% ).