AC Manufacturers Confident Of Over 15 Per Cent Yearly Growth Despite Erratic Rains

Early summer and sudden rains, this is what the national capital has been witnessing this year, courtesy of the unstable weather pattern.

Early summer and sudden rains, this is what the national capital has been witnessing this year, courtesy of the unstable weather pattern. May was unusually cool with the city clocking a maximum temperature which was 10-13 degrees below the normal temperature on some days. According to a World Bank report "Climate Investment Opportunities in India’s Cooling Sector", by 2037 the demand for cooling equipment such as air conditioners, refrigerators and cold chains is likely to be eight times higher than the current demand. Demand for a new air conditioner will increase every 15 seconds, leading to a 435 per cent rise in annual greenhouse gas emissions over the next two decades.

Even as the unusual weather pattern applied a brake on sales of air conditioners, the overall AC industry is confident of double-digit growth, driven by the prediction of heatwaves and prolonged summers in Delhi.

"With India emerging out of Covid-19 and its aftereffects, the AC industry has been on a steady growth path. With 7 per cent-9 per cent penetration of air conditioners across India, there is a huge opportunity for 'explosive growth'. The overall AC industry is expected to grow by 15 per cent– 20 per cent annually," KJ Jawa, Chairman and Managing Director of Daikin India, told ABP Live. 

"We expect to close FY23-24 as per our plans. With robust commercial and residential growth and expansion, the overall AC growth looks promising in the long run. Increasing urbanization, growing disposable income, improving consumer finance availability and increasing RACs per household are further expected to support the volume, as well as revenue growth," Jawa added.

Echoing similar sentiments, Satish NS, President of Haier Appliances India said: "The market trends predict the growth of more than 30 per cent-40 per cent this year and we are determined to achieve double-digit growth in the AC segment. At Haier, we are well aligned with customer demands, and thus we are focused on R&D investments, product innovation, and training skilled manpower."

Haier India now has built a capacity to roll out 1 million units of air conditioners. The company's manufacturing factory in Greater Noida is working towards assembling high-end quality products.

Online Sales Of Air Conditioners Surging

According to market intelligence firm GfK's "Market Intelligence Offline Sales Tracking" for January–December 2022 vs 2021, from smartphones to refrigerators and air conditioners, the premium products category grew up to 9 times faster than the entire segment in 2022. While historically the offline channel was delivering more, after Covid-19, the online channels have contributed significantly more to sales of air conditioners, says Osaka-headquartered Daikin.

"So Daikin chooses to make its product available through all the reputed online partners. With ACs demanding installation and steady after-sales requirements, offline sales remain more dominant than online sales, as of now. But this trend may reverse in the coming 5-8 years," Jawa noted.

Similarly, SPPL, the brand licensee of Thomson has introduced its range of ACs only through online partner Flipkart. However, it is mulling to foray into offline channels as well.

"We have launched our ACs on Flipkart, but we will expand offline as well," Avneet Singh Marwah, CEO of SPPL, told ABP Live.

Inverter Split ACs Bedimming Window ACs

While Window ACs cost almost half as split ACs, they are gradually being replaced by the aesthetically superior spilt ACs as modern home designs find it difficult to accommodate them. The inverter split ACs are among the best as they offer power savings, advanced cooling technology, better features, and lower running cost and some also come with low environmental impact refrigerant – HFC32.

"This summer, we see an increased customer preference for convertible ACs that offer the convenience of regulating the cooling capacity based on the requirements and therefore, ensure power efficiency and more savings. Also, there is an upward demand trend for inverter split ACs as compared to fixed speed functions as they can operate without a stabiliser even during voltage fluctuations. Customers residing in Delhi and other cities with high AQI are choosing from a special selection of ACs that are enabled with dust filters and integrated air purifiers," said Nishant Sardana, Director, Consumer Electronics, Personal Computing and Large Appliances, Amazon India.

"By launching a 1.5-ton window air conditioner, we're setting foot in all three segments of ACs, namely, split, split-inverter and window. Since we launched Thomson air conditioners last year we have seen a major growth in the split-inverter category, specifically the 1.5-ton models," Marwah informed.

More than 160 to 200 million people could be exposed to a lethal heat wave in India every year and around 34 million Indians will face job losses due to heat stress-related productivity decline. By 2037, the demand for cooling is likely to be eight times more than current levels, the World Bank has said in a report.