Consumer durable companies are increasing the prices of air conditioners again this month by 3-4 per cent, following the previous round of price hikes of around 5-8 per cent in January this year. While several manufacturers have already raised prices of their ACs, others are still evaluating a probable hike to be taken later this month or during May. “The way things are progressing on the commodity and other fronts, we have to take up prices by another 3-4 per cent by April,” Gurmeet Singh, Chairman and Managing Director, Johnson Controls-Hitachi Air Conditioning India Ltd, told FinancialExpress.com.
These major brands raise AC prices, as inflation bites
Hitachi: “The onslaught of cost up is continuing and now with anti-dumping duties being imposed on aluminium and refrigerants, we see another increase by 2-3 per cent,” said Gurmeet Singh. With the price hike, a 3 Star Inverter Split Air Conditioner by the brand that used to retail at Rs 33.5 K till last year, has now reached Rs 36.5 K to Rs 37 K.
Haier: “We increased the prices by 5-6 per cent in the last 4-5 months. With rising global freight, cost of commodities, and raw materials, we might have to consider a price hike again after May,” Satish NS, President, Haier Appliances India, told FinancialExpress.com.
Panasonic: “In line with the market and increasing commodity prices, we had to increase the price of our air conditioners by around 6-8 per cent. We are carefully evaluating the input cost changes before we take a decision on another price hike,” Gaurav Sah, Business Head, Air Conditioners Group, Panasonic India, told FinancialExpress.com.
Godrej Appliances: “In the past couple of years, commodity prices spiked nearly 28-29 per cent, however, in comparison, prices of cooling appliances increased by 16-17 per cent during this period. At Godrej Appliances, we have taken three price hikes last year totaling to 13-15 per cent across our product categories. There is still a gap that needs to be covered. There will be another round of price hike in May and then later during the second half of the year, depending on the demand-supply situation,” said Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances, told FinancialExpress.com.
Consumer sentiment not faded by price hikes
However, even with rising prices, there seems to be no let up in consumer demand for air conditioners. There is a huge pent-up demand for ACs this year with the onset of early summers and the recent India Meteorological Department (IMD) prediction of ‘above normal’ temperatures in April and May. “Also, there is a big surge for replacement since a lot of consumers are upgrading their cooling products for more energy efficiency,” said a Voltas spokesperson. “The industry is expected to grow both in volume and in value this summer,” the spokesperson said, adding that Voltas has scaled up its manufacturing and supply chain.
“Although consumer spends have got impacted due to inflationary pressures, we believe rising summer temperatures will divert discretionary spends from other categories to cooling products. We are expecting over 20 per cent growth between April- June 2022 in comparison to the pre-pandemic 2019 summer,” said Kamal Nandi.
A recent survey by Axis My India showed that 18 per cent of the respondents are planning to buy or exchange products like AC and fridge this summer season. The Consumer Sentiment Index survey of over 10,000 people showed that the overall household spending has increased for 62 per cent of families. “Indian consumers are showcasing confidence and overall sentiment is at the highest in last one year,” said Pradeep Gupta, CMD, Axis My India.
Promotion offers fall, get more targeted
As consumer sentiment remains buoyant, and companies raise prices, promotions being offered along with the ACs till last year have also been taken to a much lower level this year. However, consumer durable companies are trying to woo customers with offers, cashbacks and easy EMI options to make their purchases convenient. “We are optimistic that the summer season would rekindle people’s desire to spend in both urban and rural locations. At Haier, we are expecting to garner a growth of 45-50 per cent in the air-conditioners segment. Seeing how ACs have now become a necessity for most people, we have introduced attractive finance schemes and cashback offers to make buying easy for consumers,” said Satish NS.
Further, factors like the government’s emphasis on domestic manufacturing, the introduction of PLI schemes, and the rising consumer sentiments toward air conditioners due to education and work from home culture are also driving the ‘unprecedented growth of the industry’. Financial Express