INTERVIEW | AC prices to go up by 5-15%, sales likely to grow by 20%: Voltas MD
A sharp rise in copper prices is all set to make cooling an expensive affair this year. To combat this and currency fluctuations amid a weakening rupee, most AC brands are expected to go price hike of between 5 and 15%, said Mukundan Menon, Managing Director, Voltas Limited.
In an exclusive interaction with The New Indian Express, Menon said that Voltas, a Tata Group company, is eyeing a growth of 20% this year while the AC market overall may grow at around 15-20%.
The MD also wants to increase Voltas presence in the international market and expects to remain the fastest-growing brand in the refrigerator and washing machine market.
Below are the excerpts:
2025 was a tough year for the AC market. Do you expect a revival in demand this season?
2024 was a superb year due to the long extended summer. However, 2025 was a terrible season for the industry as AC sales fell by roughly 25% as summer was short and the monsoon arrived early. Going forward in the 2026 season, we expect that the growth will be there because the base is already low and ACs have now become more like a necessity than a luxury. At present, the AC market is roughly at 15 million units per year. This year the industry is expected to grow 15-20% while we at Voltas are expecting to grow upward of 20%.
What has been the impact of the GST cut on demand? So do you speak up?
There was a reduction of GST from 28% to 18% in September. That gave a consumer benefit of roughly 7.8% and we passed it completely on to them. However, late September and Q3 FY26 are not the season when consumers buy ACs or refrigerators. So essentially, we didn't see any great traction because of that. This summer we will get to know the impact of the GST cut on demand. However, parallely what has happened is that there has been an energy label change and prices of raw material have gone up. So that 1st of January, we have taken a price revision.
To what extent will prices rise further due to the rise in copper prices?
AC prices may further rise anywhere between 5 and 15% this year due to a sharp rise in copper prices and depreciation of the rupee. In ACs, copper is one of the most important and extensively used raw materials and its prices in the international market have gone up from $8000 per ton to $12,000-13,000 per ton. As copper is primarily imported from Vietnam and a few other places, we have to make the payment in dollars. For other imported items, the payment is also made in dollars and given the weakness of the rupee against the dollar, we will have to adjust our prices.
In recent years, the AC market has become highly competitive. How are you securing your turf amid rising competition from Japanese, Korean and other domestic players?
We are the market leader with 18% share. In recent years, the competition has increased with foreign brands becoming very aggressive. So we are often asked how we are protecting our share?
To answer this, I can say we are doing many things right. First, we have a very strong distribution network. With 30,000 counters, we are able to reach nationwide. Second, our wide product portfolio helps us to reach everyone. We have products for entry level customer, tech-savvy premium customer and performance-oriented consumers who want very good cooling in peak summer. And then, we understand the Indian market very well because for 70 years we've been doing this. The trust people have on Tata brand is huge.
How is Voltas doing in the fridge and washing machine category? Also, are you looking to enhance your presence in the export market?
Currently, we do a very small quantity of exports in Canada and a little bit to the Middle East. We want to increase exports significantly. India has to become an export hub and we are keen not to miss this. An increase is also a natural hedge against a weak rupee. At present, China exports 60% of the global market while Thailand exports 14 to 16% of the demand. India exports just 1% of the global demand. We see opportunities in the Middle East, North Africa and SAARC countries. We also see a great opportunity in the EU as the temperature is rising there.
The recent FTA with the EU is very positive for us. In the refrigerator market, we have around 8% market share and we are the fastest-growing brand here. At present, this market does about 13.5 million per annum in volumes and there is big headroom for us to grow. The same goes for the washing machines category where we have 6% market share and we are going very fast. In both categories, we are growing at a CAGR of 30% and we would like to maintain this growth.