Mumbai: The consumer durables industry seems to have weathered the economic slowdown better than other sectors. Both manufacturers and retailers have recorded double-digit growth, with the recent cut in excise duty giving the sector a further boost.
India's 24,000 crore rupee consumer durables industry has had a turbulent year. A sharp rise in commodity prices, double digit inflation, tougher credit requirements, and consumers postponing big-ticket purchases made for some tough times.
But the recent fall in interest rates and excise duty cuts seem to have turned things around. Experts say the sector could see a robust 15 percent growth this year, against 2007.
Samsung says that the sale of consumer appliances such as washing machines and refrigerators has gone up by as much as 30 per cent this month. It has also recorded a 25 per cent growth in LCD TV sales, compared to December 2007.
Rival LG expects 2008 turnover to come in 15 per cent higher than the 9,500 crore it recorded in 2007. The company recently cut prices by 1.5-2.5 per cent after the government slashed excise duty.
Lower excise duties seem to have brought shoppers back to retail outlets too. Tata's Croma, for instance, says it has seen sales surge in the last two weeks, with LCDs selling much faster than conventional televisions.
Same store sales are also around 15 per cent higher than last year. Croma hopes to cash in on this growth, and will open 8 more outlets by April 2008.
Croma's not alone in its expectations. But analysts say overall sector growth will slowdown in the next quarter, which traditionally sees lower sales.
And with no new stimulus on the horizon, consumer durable retailers may have to fall back on promotional offers to reel in the customers.