Tata group firm Voltas today said that it has increased the price of its air conditioners by up to five per cent to offset rising input cost due to rupee depreciation against dollar.
“Rupee has depreciated sharply so we have no choice but to increase prices further. Quantum of increase would be somewhere between three to five per cent,” Voltas Chief Operating Officer Pradesh Bakshi said.
The company has effected the price increase for some models and other models would follow suit in the near future,he added without sharing details.
Voltas ACs are priced at a range of Rs 13,000 to Rs 50,000 across different models.
Explaining the reasons for the price hike,he said the cost of compressors and copper widely used in AC has gone up due to rupee depreciation and has impacted company’s margin.
“If the rupee slide continues then Voltas will have to look at another round of price hike,” Bakshi said.
Prior to fresh hike,Voltas had increased prices of its products in March this year. Last year also,Voltas had to increase prices twice due to cost pressures.
“In the last two years,cost would have gone up by 20 per cent so we cannot absorb impact on margins and we had to hike prices,” he said.
Already rivals including LG India and Bluestar have hikes prices of their ACs prices. LG India hiked price of its products by 3 to 5 per cent and Blue Star increased prices by 2.5 to 7.5 per cent depending on the model.
Voltas,is also looking at increasing its spend on advertising to three per cent of the turnover this year. The company’s room air conditioner division reported turnover of
Rs 1,800 crore. In 2012–12,the company had spent 2.5 per cent of turnover on advertising campaigns.
“With our all weather AC campaign setting in,we have budgeted around three per cent of turnover for advertising,” Bakshi said.