The fall of rupee is a concern for TV manufacturers and car makers

NEW DELHI: The fall of rupees may get a positive vibrations flowing in from the latest round of GST rate cut as TV manufacturers and car makers are evaluating price inflations.

Rising interest rates in the US along with global uncertainty have lead to a trade war and has seen strengthening of the dollar over the past few months as rupee plunged to an all-time low of Rs 69.1 against the greenback on July 19. It is among the worst-performing Asian currencies. Indications are the situation may continue for some more time. A weaker rupee makes imports more expensive and raises costs for domestic manufacturers. "We are feeling the impact (from a weak rupee). We may evaluate prices," R S Kalsi, senior director (marketing and sales) at Maruti Suzuki, told a source.

The country's biggest carmaker carries a high degree of localisation on most of its products. But, it still has a substantial exposure to foreign currency through its own purchases as well as that of the vendors. Components coming from abroad include electrical, inner parts, ECUs, engine and transmission parts. Payment of royalty to the Japanese parent Suzuki and other variables also impact the company's finances. Toyota said it is looking at developments around rupee very carefully.

Luxury carmakers, who are the net importers of aggregates used in car assembly, are also worried. "We are watching the trend cautiously and will act accordingly," Roland Folger, MD & CEO of Mercedes-Benz India, said. 

Folger said a fall in currency carries a "ripple effect of lower investments, higher import cost, (and) high inflation, which increases the burden on companies, government as well as consumers." 

Some television makers are talking of a price hike from next month if situation does not change for the betterment. "It is increasingly getting difficult to manage the situation. If this persists, I expect prices to go up from the first week of August, especially for 32-inch panel," Manish Sharma, MD & CEO of Panasonic India, said.

Avneet Marwah, CEO of Super Plastronics that sells Thomson TV, said come August, prices of 32-inch category may go up by 15%, while the bigger screens may be dearer by 10%.