Mumbai: Chinese computer maker Lenovo on Tuesday said the steep fall in the rupee has led to the domestic hardware industry bleeding, and the company itself has been badly hit by the development leading to a demand slowdown. (Agencies)
"The rupee fall has affected us very badly. The rupee depreciated about 20 percent in the past six months and we are a 90 percent dollar-denominated industry. So costs have gone up by 18 percent straight away, while our margins are only about 10 percent.
"On the other hand, following our recent price hike, we have seen suppressed demand, impacting our sales. Not just us, in fact the whole hardware industry is bleeding," Lenovo India managing director Amar Babu R K told reporters here.
Lenovo, which claims to be the PC market leader in the country with about 15.8 percent market share, had increased prices by 3-5 percent in beginning of May across all products to offset the pressure on its margins caused by the weak rupee.
The rupee has been on a downhill since April and has lost over 10 percent against the dollar.
Babu further said the company's government contracts were also affected as the rates are fixed in advance.
"The rupee fall has also impacted a lot of our government contracts, as the contracts are fixed in advance on the then existing exchange rate. What is hurting us more is not just the depreciation but the volatility. A 10 percent fall in a month is very difficult to plan, as 10 percent is the level of margins that we have and there is no room for us," he said.
Though he admitted that the company expects a slowdown in growth, he did not put a number to that.
The company on Tuesday launched its ultrabook devices that start from Rs 49,990 onwards and the world's slimmest all-in-one computer that starts from Rs 89,990 onwards.
Mumbai: Chinese computer maker Lenovo on Tuesday said the steep fall in the rupee has led to the domestic hardware industry bleeding, and the company itself has been badly hit by the development leading to a demand slowdown.