Daikin raised prices in January as raw material prices rose, but added some new features to its products for new star ratings. As a result, prices for different models of split room air conditioners increased by about 7-10% compared to last year. It has launched a new range of split room ACs for Indian consumers to take advantage of eco-friendly air conditioning solutions.
After two years of sluggish sales due to the pandemic and lockdowns, major air conditioning manufacturers expect demand to pick up again this summer season, leading to double-digit sales growth. Some price increases can also occur as the cost of key inputs has increased.
“The AC industry hopes to move beyond the impact of the pandemic and respond to pent-up demand. Industry-level revenue could grow by about 15% in 2022-23 from 2019-20. Daikin is likely to deliver even higher revenue growth of around 20-25%,” said Daikin India MD and CEO Kanwaljeet Jawa.
Daikin raised prices in January as raw material prices rose, but added some new features to its products for new star ratings. As a result, prices for different models of split room air conditioners increased by about 7-10% compared to last year. It has launched a new range of split room ACs for Indian consumers to take advantage of eco-friendly air conditioning solutions.
“Customers have already experienced price increases for other household appliances such as refrigerators and washing machines. So the customers are also prepared for this kind of price increase for ACs. Customer contacts are already there in the stores,” Kuldeepak Virmani, director and senior vice president of Daikin India, told FE.
According to Virmani, R&D costs for AC manufacturers have increased as the new star rating for the energy label comes from July. “We are spending more money developing new models that are more energy efficient. These are mainly inverter ACs. The new star ratings for the energy label have increased the costs by approximately 5% per product. We take 50% of this and pass the rest on to customers,” he said.
According to B Thiagarajan, MD, Blue Star, the residential AC industry is expected to grow 20% this summer compared to the summer of 2019 due to pent-up demand and projected heat wave conditions.
“During two summer seasons, people were not buying ACs because of Covid and temperatures are rising. The company was sure to grow faster than the industry this summer. I think we will grow by 25%,” he said.
Blue Star has a 13.25% market share in the residential AC segment and aims to reach 14% this year. To achieve that, Thiagarajan said the first thing one needs is an affordable range of products – the total now stands at 110.
He hinted that the company could raise prices as the prices of key inputs such as copper, aluminum and steel have risen.
“We will do a review in mid-April to see if we need to make a price hike,” he said.
Manish Sharma, CEO of Panasonic India, said ahead of the summers that the company is witnessing a rising demand for smart air conditioners that provide healthier indoor air quality. He said the AC industry is expected to grow by double digits in the summer.
“In fact, Panasonic India’s AC division across the country, benefiting from increased sales of AC inverters, delivered impressive sales growth of nearly 45% in FY21,” said Sharma. To ensure the growth momentum, Panasonic recently launched its latest marketing campaign, ‘AC for Healthier Homes’.
This post Price rises likely as input costs rise: AC makers look to double-digit sales growth this summer
was original published at “https://www.financialexpress.com/industry/price-hikes-likely-as-input-costs-on-the-rise-ac-makers-eye-double-digit-sales-growth-this-summer/2463406/”
