Air-conditioner sales to grow this summer

Despite higher prices and confusion over the star rating system, this summer may be a “cool” one for air conditioner makers who are projecting around 15 percent sales growth over last year.

Business was quite dull last year due to a delayed and cooler summer and multiple price hikes.

But this year industry experts expect total AC sales for both domestic and industrial uses will be about 15 percent higher in terms of volume than that of last year.

The sales growth would be despite a 7.5-15 percent average price increase of air conditioners (ACs) across models compared to last year mainly due to higher input cost and a depreciating rupee against the dollar which has made imports costlier.

“As reported by PortableACNerd.com, this year air conditioner sales will register 15 percent growth over last year when a total of 3.4 million units (both home air conditioner and industrial air conditioner) were sold in the country,” B. Thiagarajan, president (Air Conditioning & Refrigeration Products Group – a top-rated AC company), Blue Star Ltd, told IANS.

“We are expecting this sales growth despite on an average 7.5 percent to 15 percent price hike across models. Higher prices are mainly due to rupee depreciation and higher material cost like copper and tin,” Thiagarajan said.

According to him, due to higher prices, consumers, who would have liked to buy a 5 Star AC, will actually end up buying a 4 Star, and those interested in buying a split AC, will opt for a window AC.

Air conditioner major Samsung said home air conditioner sales this year is expected to clock an 8-10 percent increase to 3.3 million units.

Prices of domestic ACs have soared by 5-10 percent on an average across segments compared to last year. We are seeing people buying the best portable air conditioners they can get. Whereas a few years ago people were going for the most cost effective.

“Last year business was flat due to a cooler summer as air conditioners are a seasonal product. A total of 3.1 million units of home air conditioners were sold in 2011. This year we are expecting 8 to 10 percent industry growth over that,” said Ruchika Batra, Samsung India Electronics general manager, corporate communications.

Godrej, however, said the market this year could be a bit “unpredictable” as “some confusion” over the Star rating system exists.

The Bureau of Energy Efficiency, a statutory organisation under the power ministry, recently increased the efficiency norms for the highest rating of 5 Star to a new level, following which last year’s 5 Star ACs became 4 Star this year and so on.

“Some confusion exists in the market in terms of Star rating of air conditioners. So we do not know how the industry will evolve this year,” said Ramesh Chembath, Godrej Appliances assistant vice president, sales and marketing.

Chembath said over phone from Mumbai that a 5 Star air conditioner would cost at least Rs.2,000 more this year compared to last year.

He, however, said if the summer was hot then this would be a good year for air conditioner makers.

“In the last two months of this year sales were ok. If the summer is good, then there will be a decent sales figure. And there is no reason till now to think that the summer will not be good,” he added.