The Telegraph
Monday , October 8 , 2012
Since 1st March, 1999
CIMA Gallary

Durables ready to cash in on festive fun

Calcutta, Oct. 7: The Rs 35,000-crore consumer durables industry is all keyed up for the festive season as it looks to shrug off the recent sales slowdown caused by the fluctuating rupee and high inflation rate.

Most companies have lined up a string of launches, and some of them are ready to absorb the cost pressure without raising prices.

Panasonic India, which is targeting sales of Rs 10,000 crore in fiscal 2012, expects its turnover during the festive season to touch Rs 1,200 crore. The eastern region alone is likely to contribute Rs 150 crore. The company will spend Rs 75 crore on marketing, with Rs 25 crore alone on brand positioning. Last year, Panasonic registered sales of Rs 5,500 crore.

According to Manish Sharma, managing director (consumer product division), Panasonic India, higher disposable income and greater accessibility to credit have widened the consumer base.

“The consumer durable sector is distinguished by strong growth trends in all domains — from the rise in the affordability factor of the Indian population, and increased penetration and exponential growth of rural markets to policy support by the government in terms of FDI and large-scale investment plans by corporate houses. During the festive season, white goods makers are aiming at increasing sales revenue to make up for the slow sales early this year,” he said.

Panasonic, which has introduced normal festive freebies for customers, expects to achieve 35-40 per cent of its annual sales during this season, with flat panel television sets likely to bring in 40 per cent of overall revenues.

Sony India, which has set a 30 per cent growth target this year to reach the Rs 8,000-crore mark over Rs 6,300 crore last year, expects a Rs 340-crore business in the August-November festive period from the eastern region. This is a 48 per cent growth over the same period last year.

The company will invest Rs 20 crore towards ATL (above the line) and BTL (below the line) advertising techniques and increase the number of retail outlets to 850 this fiscal from 700 last year.

“We expect the Durga Puja festive period to contribute 37 per cent to the total sales of east India in FY 2012,” said Sunil Nayyar, senior general manager (sales), Sony India. The company plans to sell 67,000 units of Bravia television sets during August-November, achieving 40 per cent share in the flat panel display market in the east. It also expects to sell 82,500 units of Cyber-shot cameras and 25,200 units of Sony Vaio laptops, grabbing 20 per cent market share.

LG Electronics India plans to invest Rs 100 crore in flagship product communication to widen its reach to customers.

“We will offer a zero per cent finance scheme on selected products. Overall, we expect between 25 per cent and 30 per cent growth in sales during the festive season…input cost is certainly a concern and rupee depreciation is also alarming because of which there have been multiple price hikes in the past one-and-a-half year. At present, we are not considering any price hike till Diwali,” said L.K.Gupta, vice-president (marketing), LG India.

Sansui is also hoping to strengthen its market position through the launch of a range of Brush Connect LCD television sets. “Increasing dollar exchange rates have impacted the manufacturing cost of products which has stressed margins making it increasingly tough to stretch businesses. Inspite of this, the consumer durables sector has been showing remarkable growth patterns,” said Arun Pal, chief marketing officer, Sansui.

Bosch Home Appliances, which entered India in 2011, has set long-term plans for the country and is looking to consolidate its position this festive season. “Considering our steady growth and the response received last year, we hope to gain a larger share in the market this festival season,” said Dirk Dedekind, marketing head, Bosch Home Appliances.