The impact of unusual rains across northern India on air conditioners (AC) sales will be clear in the next two weeks, said B Thiagarajan, Managing Director of Blue Star. He added that sales remain robust elsewhere, especially in the southern and western states where temperatures are soaring up to 40°C.
“National Capital Region (NCR) sales pick up mostly during April end, May and June. We will have to wait and watch for another two weeks to see how the weather and demand will pan out in the region. It is too early to say anything now. However, many other markets are very hot and sales remain robust across South and West India,” said Thiagarajan.
Sales of AC in the North and East parts of the country are yet to pick up due to unseasonal rains which so far have kept the temperature pleasant. Market experts fear that if the mercury does not soar in the next few weeks, it might ruin the peak summer season for AC manufacturers for the second consecutive year.
As per industry estimates, AC sales fell by 20-25% last year as summer was short and the monsoon arrived early.
“While sales fell last year, the important thing is that the CAGR is still 9-10%. If sales fall or are below expectations one season, there is nothing to worry about,” said Thiagarajan. According to Blue Star, the broader industry outlook remains robust with India’s room AC market projected to grow from around 14 million units currently to nearly 30 million units by FY30, driven by rising incomes, urbanisation, and increasing climate intensity.
Besides the changing weather patterns, demand for ACs may also feel the heat of rising prices. Most players have increased sticker prices in the range of 5-15% due to rising commodity prices, especially of copper. The ongoing geopolitical development in West Asia has also added to commodity and logistics costs.
Thiagarajan said that in the case of Blue Star, so far they have taken a price increase of 8% and will go for another 5% in the near future.