 Online edition of India's National Newspaper Thursday, Jul 09, 2009 ePaper | Mobile/PDA Version |
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Increase in input cost Drop in sales feared NEW DELHI: The consumer electronics industry seems to be in no mood to pass on the benefit of cut in basic customs duty on LCD panels from 10 per cent to 5 per cent announced in the latest budget to customers. Its plea is that the increase in input costs is more than the duty cut announced. While the two major LCD TV manufacturers — LG and Samsung — have no immediate plans to reduce the prices, other companies like Sony and Haier, which do not manufacture LCD TVs in India, will not be impacted by the government’s decision. Interestingly, all consumer electronic majors now fear drop in sales of LCD TVs. Stating that they have no plans to reduce the prices of LCD TVs, LG Electronics India Pvt. Ltd. Business Head (Home Entertainment Business) Amitabh Tiwari said the cost of module, which happens to be almost 70 per cent of the cost of an LCD TV, would be seeing an increase of almost over 30 per cent beginning July till the year end. “Therefore, we are left with no choice but to pass it on to the consumers. The drop of 5 per cent on 70 per cent in reality means 2 per cent on the complete LCD TV. The module increase is stiffer than the relief,” he said. “We increased our LCD TV prices by an average of 5 per cent from July 1, and are not in a position to roll it back immediately. The drop in customs duty will perhaps help us in absorbing some increase going forward,” he added. Similarly, Samsung India said it had no immediate plans to cut prices of its LCD TVs.
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