Airconditioner makers like Voltas, LG, Daikin, Panasonic, Blue Star, Hitachi and Haier are witnessing some green shoots in sales this year after two successive years of weak growth and expect a double-digit rise in their sales this season. Also, the companies are expecting higher adoption of superior technology and power efficient range of inverter airconditioners (ACs) by consumers, with northern India being seen as a bigger demand driver in the market as usual.
AC makers also hope that slightly higher temperatures this summer, as predicted by the Met department, will push sales in the coming months. Consumers are being lured by companies with several offers that include easy finance, extended warranty and free service etc.
Daikin India MD and CEO Kanwaljeet Jawa looks at this season as "very promising" for the residential AC segment and believes that fundamentals are in place and intact. "The industry is poised at an inflection penetration of 7-8 per cent, and I see it exploding over 10 per cent. The developed nations like Japan, the US, Australia and China are all above 90 per cent penetration. India has a huge potential. I predict the industry growing at 14-15 per cent during FY2019-20," he added.
Besides, companies are expecting higher rural electrification and rise in disposable income and aspiration levels to help ramp up sales figures this year. They are investing substantially on branding and market to reach consumers in tier III places and rural areas.
"This year the IMD has predicted strong summers, and some of the green shoots are already visible with temperatures rising in southern India in March itself, and markets showing buoyancy in parts of east and west India," Voltas MD and CEO Pradeep Bakshi told PTI. Panasonic India President and CEO Manish Sharma said there is a progressive shift in the consumer demand for upgraded technologies and energy-efficient range of ACs.
"The progressive shift in the consumer demand for upgraded technologies, energy-efficiency and health and lifestyle value offerings has had a positive rub-off on the air conditioners segment and driving growth of the industry. This coupled with improvement in consumer's discretionary income and rapid electrification are other factors that would contribute to the growth in the industry," said Sharma.
According to him, last year the AC industry saw a slow growth in volume sales while the value sales witnessed marginal increase of around 5 per cent driven by the demand shift towards inverter AC. Johnson Controls-Hitachi Air Conditioning India CMD Gurmeet Singh said: "Yes, the air conditioning industry in the last couple of years has seen a weak growth but we expect that trend to turnaround this year. Given the timely onset of summer and the prediction of below normal monsoon this year, we expect that the industry would see a double-digit growth over last year."
LG Electronics India VP Home Appliances and Air Conditioners Vijay Babu said that in the January-March quarter, the company has already witnessed around 38 per cent increase in sales (by value) and expect this to be over 40 per cent in the current April-June quarter.
"Now the farthest corner of the country has been electrified and there would be a definite rise in demand from tier III and IV places this season," Babu added. According to Haier Appliances President Eric Braganza, with changing preferences, AC is no longer a luxury goods and is gradually becoming a necessary appliances.
Haier, which had witnessed a 40 per cent growth in residential AC segment and 50 per cent in commercial AC business in 2018, expects to "continue with the same momentum" with locally relevant product portfolio, Braganza added. Blue Star Managing Director B Thiagarajan said, "We continue to make significant investment in product development, after sales service, as well as brand building and are confident of enhancing our market share."
The Indian room AC industry market is expected to be of around 4.5 million units with more than 20 companies competing in the space.