Manufacturers to Raise Air Conditioner Prices

Higher materials costs are prompting Mitsubishi Electric Corp (Melco). and other air conditioner manufacturers to hike prices, as reported by major Japanese newspapers.
Melco, a major room air conditioner manufacturer in Japan, intends to raise prices on its entire lineup of consumer and commercial units by around 10% this fall. Despite efforts to boost productivity and reduce parts, its air conditioner business faces a nearly 10 billion yen profit decline in fiscal 2008 because of the high cost of materials like iron, copper and plastic.
Other major players such as Matsushita Electric (Panasonic) and Daikin Industries and Hitachi Appliances are also considering price hikes.

The iron used for the outdoor components of air conditioners now costs 30-40% more than it did at this time last year, and the copper used for the heat exchangers and coolant piping is triple what it cost three years ago. And high oil prices have boosted the cost of plastics.
Since refrigerators and washing machines use the same materials, profits on these appliances are also being squeezed. But these products are sold mainly through mass merchandisers so it is hard for manufacturers to raise prices.

Air conditioners, on the other hand, require installation and tend to be sold more through the regional shops of the manufacturers, so raising these prices first will be easier.