Haier
Neeraj Gupta
Senior General Manager-Living Environment Division,
Mitsubishi Electric India Pvt. Ltd.

The lockdown impact

As COVID-19 pandemic continues its blows on the economy of the country, companies are seeing a major loss in their earnings. The country’s air conditioner (AC) manufacturers and suppliers have also been affected. The AC sales are at halt during the peak sales season of summer months in India.

The country has already witnessed high to very high temperatures in May and June. Though people were inside their homes because of lockdown, service requests have been piling up, as it has been the hottest period of the year. There has been a loss of sales, but we are trying our best to provide timely service for our existing customers. Mitsubishi Electric Air Conditioners issued guidelines for its technicians to undertake all precautionary measures, including PPE kits, sanitization, etc., to ensure safety for its customers, channel partners, and service providers. We as a responsible and committed partner, and are ever ready to service our customer’s needs.

Lockdown during peak season. Lockdown during peak summer season has affected air conditioner business in a big way. The industry sources estimate approximately 65–70 percent sales during the summer months of March to June months, out of which 20 percent was contributed by April month alone. The extreme challenge came for the AC industry with announcement of nationwide lockdown from March 24, 2020. Thanks to our loyal customers, highly efficient and reliable products, good stock availability, and efficient service, we could minimize the impact of lockdown, and hopefully will recover soon in the coming months.

Attending service requests and installation. It is always recommended to get the air conditioner installed and serviced through trained and authorized professionals to deliver 100-percent product performance. Lockdown and related developments fueled migrant movement, which affected the availability of trained and semi-trained manpower for HVAC industry to meet seasonal demand. Mitsubishi Electric Air Conditioners sales and service dealer network managed to keep the dealer staff and technicians at their respective locations safely, and their daily needs were well taken care of during the tough lockdown period. We used the lockdown period to enhance skill set through special online training to dealer staff on measures for installation work, technical, and product-related issues under COVID-19 situations. Currently, our dealer network is executing new installations smoothly and efficiently.

Supply chain management and setting eco balance. Lockdown had a severe impact on AC supply chain as the manufacturers and dealers were stuck with huge unsold inventory. MEI was also carrying higher inventory as it was part of summer season preparation. The inventories released from our factories were huge, unaware of the coming conditions, creating a blockage between the factory and the end-user. With able support from our channel partners and loyal customers, Mitsubishi Electric Air Conditioners have been able to liquidate most of the inventories in record time and also maintained eco balance in the environment through quality products. Now we are maintaining stock and product mix for the remaining season to fulfil customers’ sudden demand.

Assuring safety of customers. These are tough times; human behavior has also undergone some changes. These tough conditions of pandemic and lockdown played a major factor in deciding sales and usage of ACs as customers are showing resistance to allow the installation or service team(s) to enter their premises. Mitsubishi Electric Air Conditioners team understands this natural fear at the customer end and has taken proactive steps to win trust of the customer. We make sure to gain customer trust by use of PPE kits, sanitizer, protection gears like mask, gloves, head cover, and shoe covers to create topmost hygiene at the customer’s place. We have strong belief and categorize our customers and employee’s health and safety as our top priority.

Handling uncertainty in sales volume. The government has been kind and has set up various schemes for encouraging and boosting the economy, which will reflect a good impact in the coming months. Unfortunately, recovering losses during peak season will be very difficult to negate. Industry estimates market demand to degrow by at least 30–40 percent for FY2020-21.

With the pandemic affecting the economy, Mitsubishi Electric Air Conditioners suffered during lockdown, with almost no sales in April, and huge unsold inventories with dealers during lockdown, there was a lot of uncertainty in the market and everyone was looking for a fair opportunity to have some relief, which came during second half of May. Mitsubishi Electric with SSD as backbone of their business is looking at the so-called off-season period to catch up with lost numbers of lockdown period. We are also sure to have improved sales in coming months as our products are majorly manufactured in Thailand. Our Thailand factory is 100-percent operational during the peak season, as most of the key components like compressor, coil, plastic components, valves, PCB, and blowers are manufactured in Thailand in-house, which helps us to maintain optimum stock levels. We plan to take leverage in the coming months and improve sales.

Special schemes for a special year. At Mitsubishi Electric, every decision we have taken is considering our loyal customers. Therefore, we are offering a 10-year compressor warranty scheme on the entire range of inverter and non-inverter type of room air conditioners (RAC only) and additionally, 5 (1+4) years controller/PCB warranty on the entire range of inverter and non-inverter type of room air conditioners (RAC only).

Keeping in mind the current conditions and aftermath of COVID-19, Mitsubishi Electric Air Conditioners will always keep safety and health on topmost priority to support the fight against the outbreak and continue to have growth in business. FY20-21 is a special year and needs extra care to surpass the adversity, and grow stronger than before. Hence, we have placed our strategies in line with the market dynamics and believe that we will adequately manage the COVID-19 pandemic and lockdown situation and come out stronger than before. 

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