Good times ahead for consumer durables: FICCI
26 February 2008
According to a survey carried out in 2007 by the Federation of Indian Chambers of Commerce and Industry (FICCI), consumer durable goods is all set to witness a 12 per cent growth this year.
Thanks to the consumers' preference for high-end products for premium brands floating superiority technology, the consumer durable goods sector recorded a growth of 11.5 per cent in 2006-07 as against 8.5 in the previous year. Clearly, there is a market shift in consumers' preference, with aspiration to own premium lifestyle products, which has resulted in a larger sales volume of consumer durables
Rural India, which accounts for nearly 70 per cent of the market, witnessed a 25 per cent annual growth while the urban consumer durables market reflected an annual increase rate of 7 to 10 per cent.
FICCI president Habil Khorakiwala feels that the growth of the changing dynamics of consumer behaviour is a direct result of higher disposable incomes. Luxury goods are now being perceived as necessities in households and consumers spend on lifestyle products, Khorakiwala stated.
According to FICCI's economic advisor Anjan Roy the consumer durables market, which picked up in January 2008 reflected increased sales by major consumer durable companies and the sales volume will only go up in the coming months. Consumer electronics manufacturers are already working newer strategies for their summer sales, a period that industry looks forward to. A cut in customs duty on inputs will enhance the manufacturing competitiveness of the industry by reducing cost and boosting demand and sales.
Rationalisation of taxes, clearly, seems to be a universal demand across the consumer electronics sector to ensure Indian manufacturers a level playing field. Fast growing electronic entertainment products such as high end TV sets, frost-free refrigerators, fully automatic washing machines, split air-conditioners, DVD players, microwave ovens, home theatre systems - products entailing high aspirational value are likely to see a growth in consumption.