Makers of durables expect rise in premium products' demand

NEW DELHI: Prices of air conditioners, large-screen televisions and dishwashers will see reductions from Sept 22, with the industry expressing confidence of a consumption boost as well as higher penetration across the country.According to initial estimates prepared by industry analysts, AC prices will come down by around 8% as companies factor in the GST rate cut from 28% to 18%. For example, the popular 1.5-tonne split 5-star rated AC from LG will likely see the price come down by Rs 4,000 against the current price of Rs 44,000. A 3-star version of Voltas will see a price drop by Rs 3,000 against the current price of Rs 34,000.On TVs, where the GST has been cut for screens above 32-inches, the move is likely to see consumers shift to larger screens.

For example, a Sony Bravia 65-inch, that is currently priced at Rs 1.4 lakh, will likely see a cut of Rs 11,000.In dishwashers, a BSH Home Appliances premium model is likely to see a price cut of Rs 8,000 on the current price of Rs 1.04 lakh.

Manish Sharma, chairman of Panasonic Life Solutions India and South Asia, said "premiumisation will be a logical outcome" of the move. "This had been due for a while. It has come at the right time.

Finally, there will be something on the demand side which will be significant." Sunil Vachani, chairman of contract manufacturing major Dixon, said while there will be significant gains for the consumer durables and electronics industry in the short-term, the measure will also be beneficial from the long-term perspective. "This decision will propel the domestic market which also helps us compete globally more effectively as we gain in cost competitiveness due to a large manufacturing scale.

So, it becomes a twin benefit, especially for contract manufacturers."Saif Khan, MD and CEO of BSH Home Appliances which sells Bosch and Siemens dishwashers, said the GST reduction will make premium, energy-efficient home appliances more accessible. "With the festive season near, this move is poised to provide a much-needed boost to the industry, as more consumers seek to upgrade their homes with products that offer convenience, superior hygiene, and sustainability. The dishwasher segment is on track to be the fastest-growing category within the home appliances market in India, with an anticipated growth rate of 30-35% in the next two years," he said.