Johannesburg | Tuesday
CONSUMERS can expect an increase of up to 20% in the price of electronic appliances by January, based on the current rate of devaluation of the rand.
This is the opinion of Martin Maddox, group managing director of Panasonic SA.
He said on Tuesday that the dramatic plunge in the value of the rand would affect most consumer electronic companies – even those companies that have local manufacturing facilities import components.
Said Maddox: ”Based on demand, we will have to bring in stock at new prices by January, or even before if demand exceeds expectations, which it may well do over the Christmas period.
”This is when consumers will really feel the impact on their wallets.
”The possibility of a world economic recession is still on the cards, and not one of us will be immune to the consequences.”
In the past, when the rand suffered a sharp decrease in value parent companies of multinationals, such as Matsushita, have supported subsidiaries in developing markets by providing price assistance.
However, this will be more difficult given current market conditions.
”Most of the consumer electronic companies based in the East have suffered net operating losses in recent months.
”In addition, while, historically, demand for consumer electronics has been high over the Christmas season, the world crisis and the resulting recession in major Western markets means that realistically Europe and the USA could expect lower sales this Christmas.
”Therefore there will be less revenue available to parent companies to subsidise developing markets,” he said.
Maddox added that the price increase could be even worse than anticipated, depending on exchange rates and world volume production over the coming months.
There is likely to be a great deal of pressure on developing markets and their currencies, and it is extremely difficult to predict the future behaviour of the rand. – Sapa
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