Prolonged heatwave sends AC sales north

Tribune News Service

Vijay C Roy

Chandigarh, June 20

Soaring temperature and heatwaves across the country have pushed the demand of room air-conditioners (ACs). The unprecedented growth especially from March to June is likely to push the sales to 15 million units in the current fiscal year compared to around 11 million units in the last fiscal.

“The demand started pouring in right from March. If you ask our growth from March it will be anywhere between 70-100 per cent. According to rough estimates, the industry is likely to grow by 30-40 per cent during the period March to June,” said Pradeep Bakshi, Managing Director & CEO, Voltas Limited.

The market size for room ACs is around 11 million units. For the manufacturers, summer is the main season that drives sales. Especially between March and June, 60% of annual sales happen. According to the manufacturers, the blistering heat in the current year across the regions has driven the sales like anything.

“The current summer season is a very hot one and the industry witnessed over 70% sales in April and again in May,” said B Thiagarajan, managing director, Blue Star Ltd. There are around 12 major brands such as Blue Star, Voltas, LG, Hitachi Johnson, Lloyd, Panasonic, Daikin and Godrej competing against each other.

The unprecedented and unexpected demand has opened up opportunities for the manufacturers, but at the same time, they have been grappling with capacity constraint and key component shortage. In order to cater to the increased demand, some of the manufacturers were on expansion spree.

The manufacturers are airlifting components such as compressors, aluminium, copper and PCB circuits to meet the spike in demand. For example, Voltas has been airlifting components from Thailand, Malaysia and some other South East Asian countries.

Capacity constraints

The unprecedented and unexpected demand has opened up opportunities for the manufacturers, but at the same time, they have been grappling with capacity constraint and shortage of key components.

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