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ACs set to cost more

Planning to buy an air-conditioner (AC) this year? Be prepared to shell out more.

Thanks to new energy efficiency norms and the weak rupee, prices of ACs will go up by more than 10 per cent this year.

The Bureau of Energy Efficiency (BEE) has introduced new ratings for the year, according to which AC units will have a rating upgrade. For example, what was a 4-star rated unit last year will be a 3-star rated this year. In other words, to buy a 4-star rated AC unit this year, buyers will shell out what they paid for a 5-star rated unit last year.

According to industry sources, the rating upgrade would result in at least 4-5 per cent increase. Besides, at an average rate of Rs 61 a dollar (against Rs 55 last year), the weak rupee will also take its toll on the pricing. Overall, there will be a price increase of 10-12 per cent. “The impact of rating upgrade will be more on window units than its split counterparts, as the cost of technology for a window unit is higher,” said B. Thiagarajan, President (Air-conditioning and Refrigeration Products Group), Blue Star.

Moreover, he said, many countries have stopped investing in R&D for window units. “So, it is technically challenging to keep the noise under control in the window unit, while increasing its energy efficiency.”

Beaten by the increasing input costs and falling market share, most manufacturers have started phasing out window models. Samsung completely phased out window units two years ago.

Besides, be it split or window, most brands import at least 70 per cent of the components (in value terms). This will result in substantial increase in input cost, said Pradeep Bakshi, President and Chief Operating Officer, Voltas Ltd.

Due to the rupee-dollar volatility, in the last two years, AC prices went up by 25 per cent. However, thanks to increasing penetration and growing replacement market, the industry grew by 7-8 per cent last year. The Hindu BusinessLine

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