Feb 10, 2000|
Slump in CTV sales linked to budget, stock markets
The month of January 2000 has witnessed a decline in colour television (CTV) sales. CTV dealers attribute this to the recent surge in stock markets, which has driven consumer savings to stocks than consumer durables.
According to a news report in a leading financial daily, CTV dealers are grumbling of a near-50% decline in sales. They attribute this to a cash crunch in the market. This has been aggravated by the recent run-up in stock prices, which has seen consumers divert funds to stocks rather than on purchases of consumer durables.
A pick-up in primary markets resulting in IPOs being oversubscribed several times over, is another factor that has seen lower buying interest in consumer durables. The mutual fund primary market is also witnessing a strong inflow of investments from retail investors.
Some dealers also opine that the sales tax rationalisation in some states may have forestalled purchases. Another group feels that consumers have postponed purchases until the Union budget (on February 29, 2000) in anticipation of a cut in CTV prices. However, there is a degree of unanimity among dealers that premium models are witnessing slack demand, and even dealers have declined from offering incentives on purchases of premium models.
Pre-budget anticipation is building up and CTV manufacturers believe that a cut in import duties of picture tubes is in the offing. When that happens CTV prices could fall by at least 5% and CTV sales could be on the upswing post-budget and bring the smile back on the faces of dealers.
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