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Colour TV sales plunge to 3-4%

BS Corporate Bureau

Preliminary reports from television manufacturers suggest that sales of colour television sets in September slumped to around 3-4 per cent as compared to the corresponding month last year. This is in sharp contrast to a healthy 18 per cent growth in July and 21 per cent growth in August.

Even during the peak festival season-October to December-the industry expects CTV sales growth to average 10 per cent a month, taking the final sales figure for the whole year to 5 per cent more than last year's 5 million sets.

Growth in value terms during the year is expected to be around 1-2 per cent, Consumer Electronics and TV Manufacturers Association president Rajeev Karwal said after the association's annual general meeting.

Sales of television and other consumer electronics normally peak during the October-December period, which is not only the festival season but also the time when salaried classes get their annual benefits and the rural population starts receiving its earnings, post-monsoon.

Karwal, however, reasoned that several external factors including the consumer's spending habits in a sluggish economy and the overall GDP growth rate are affecting CTV sales.

"Also, though the country as a whole may have had a good monsoon, large pockets in several states such as Madhya Pradesh, Gujarat, Orissa, Andhra Pradesh and Maharashtra were bereft of adequate rains. We do not expect sales to increase at all in these regions during the festivals," he said.

Gulu N Mirchandani, chairman and managing director of Mirc Electronics, which manufactures the Onida brand of CTVs, said margins have been brought down substantially by all companies during the year, evident from the drop in value growth.

Karwal said there has been a 10 per cent price erosion (at the customer's end) and a 6-7 per cent cost erosion during the same period. Margins have eroded by around 3-4 per cent.

He said the consumer durables industry registered a three per cent growth in value terms in 2000-01 at Rs 115.50 billion against a turnover target of Rs 135 billion.

And unless the government took note of the industry's earnest demands -- lower excise and import duties, even this magnitude of growth would become difficult to achieve, he added.

Cetma has already begun implementing a five-point agenda which includes reviving consumer interest by launching new technology and new products, managing costs and prices and managing trade relationships.

Karwal said the audio CD mini-compo segment recorded a growth of 35 per cent at around 20,000 units in August this year against 14,500 units in the same month last year.

The headphone stereo system category grew to 60,000 units in August 2001 against 55,000 units in August last year.

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