utis rising refrigerator: Consumers planning to purchase a refrigerator this year might want to act fast, as prices are expected to rise by up to 5% due to the implementation of revised Bureau of Energy Efficiency (BEE) norms. Major manufacturers like Godrej Appliances, Haier, and Panasonic have confirmed that these new regulations, effective from January 1, 2024, will likely result in increased costs for consumers, particularly for specific models and star ratings.
What’s Driving the Price Hike?
The recent BEE labelling changes have introduced stricter energy efficiency standards that manufacturers must now adhere to. These updates require separate star labelling for both the freezer and refrigerator compartments in frost-free models, marking a significant shift from previous norms. According to Kamal Nandi, Business Head and Executive Vice President of Godrej Appliances, this dual labelling is a new requirement, and the effort to meet these enhanced standards is expected to drive prices up by 2-5%.
“Every time energy efficiency norms tighten, manufacturers face increased costs,” said Nandi. “These costs arise from the need for better insulation and more efficient components, leading to a necessary price adjustment of around 2-3% across various models and star ratings.”
Net vs. Gross Capacity: A New Way to Measure
Another significant change under the revised BEE norms is the shift from declaring the gross capacity of a refrigerator to its net capacity. Net capacity reflects the actual usable storage space available to consumers, excluding non-usable spaces like gaps between shelves and doors. This adjustment aims to provide customers with a clearer understanding of the storage space they are paying for, enabling more informed purchasing decisions.
“For example, gaps between the door and shelves, which are not usable, will no longer be counted in the total capacity,” Nandi explained. This change could impact the perceived value of certain refrigerator models, particularly those that previously relied on gross capacity for marketing purposes.
Manufacturers’ Responses: How Much Will Prices Rise?
Haier Appliances India’s President, Satish NS, noted that the revised norms have necessitated changes to compressor technology, further contributing to the anticipated price increases. “With the redefinition of energy efficiency standards, some compressors will need to be reloaded or replaced, resulting in a 2-4% price hike,” he said.
Panasonic Marketing India’s Managing Director, Fumiyasu Fujimori, echoed these concerns, predicting price increases of up to 5% as a direct consequence of the new BEE standards. “We are monitoring the situation closely and will try to absorb as much of the additional cost as possible, but some of it will inevitably be passed on to consumers,” Fujimori stated.
The Impact on the Indian Refrigerator Market
The Indian refrigerator market is already on a growth trajectory, with a projected compound annual growth rate (CAGR) of 11.62%. A report from Research And Markets valued the market at USD 3.07 billion in 2022, and it is expected to reach USD 5.88 billion by 2028. However, the anticipated price hikes could pose challenges for entry-level buyers, who may find it harder to afford new refrigerators as costs rise.
Conclusion: What Should Consumers Do?
With refrigerator prices set to increase, consumers may want to consider purchasing sooner rather than later. The revised BEE norms are designed to promote energy efficiency and transparency, ultimately benefiting consumers in the long run. However, the immediate impact will be felt in the form of higher prices. By understanding these changes and the rationale behind them, buyers can make more informed decisions and potentially avoid paying more in the near future.
As the market adapts to these new standards, staying informed and planning ahead will be key to managing the costs of home appliances.
