Looking ahead

New Delhi, Aug. 3: The Rs 20,000-crore consumer durables industry is banking on the festive season to prop up growth, after getting hit by high inflation, rising interest rates, uneven monsoon and soaring input costs.

“Early monsoon and high inflation affected the consumer durables industry with consumers postponing their purchases. But we expect demand to resume with the onset of the festive season. This will help industry record a 25-30 per cent growth rate against the projected 15 per cent,” said Kamal Nandi, vice-president of Godrej Appliances.

The industry has hit a rough patch lately. The demand for ACs has come down by 15 per cent and refrigerators by 10 per cent in the first quarter of the current fiscal compared with a growth rate of 30 per cent and 15 per cent for ACs and refrigerators, respectively, in the previous corresponding period.

According to ORG data, the colour television segment registered a lower growth rate of 18 per cent during the January-June period this year compared with 21 per cent in the same period last year. Sales of DVD players grew 15 per cent compared with 30 per cent a year ago; air-conditioners by 18 per cent (51 per cent) and refrigerators 7 per cent (15 per cent).

However, a higher disposable income, a slew of product launches and promotional offers during the festive season are expected to help the industry recover sufficiently.

According to V. Ramachandran, director (sales and marketing) of LG Electronics, the industry will meet the projected growth target of 15 per cent, if not exceed it, in the second half of this year.

“This will be better than the 10-12 per cent growth rate in the first half on the back of poor sales of air-conditioners,” he said. “It is expected that the revised salaries proposed in the budget will also get disbursed in the next few months. There will be more cash in the hands of government employees and this will lead to an increase in purchases,” he said.