LG Electronics India is going to hike air conditioner (AC) prices by 6-7 per cent next year, in view of the rising copper and aluminium prices, said Ajay Bajaj, product group head, ACs. |
The hike, effective from January 2006, could see, for instance, the bestselling 1.5 tonne remote AC, which costs Rs 16,000 now, could go up to Rs 16,700-16,800 next year, said Bajaj. |
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Copper and aluminium together make up 17-18 per cent of the total production cost. Copper prices, which were Rs 180-190 per kg last year have crossed Rs 300 per kg this year. Aluminium prices, too, have gone up by 30-40 per cent. |
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Since LG imports 60 per cent of its raw materials, the rising dollar has also been a matter of concern, said Bajaj. |
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On possible impact on sales, he said that there could be a backlash in the first two months of the hike coming into effect but the company was hoping others would follow suit as rising input costs were hitting everyone alike. |
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A rival company executive said that LG had made such an announcement last year as well and had not followed it up with an actual price hike. So the market would be watching for the next development. |
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Admitting there was pressure on margins due to rising raw material costs, Rajesh Jain, Voltas general manager - key accounts and marketing, said that the company will take a call soon but the decision would also take into account what another major player, Samsung, does. |
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Samsung is not contemplating a price hike for its ACs, the company spokesperson said. |
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Chill effect
Hike is due to rising copper and aluminium prices The 1.5 tonne remote AC, which costs Rs 16,000 now, could rise Rs 16,800 next year |
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