AC makers eye 15-18% growth as summer arrives early
New Delhi: The early arrival of summer this year, especially in the northern and eastern parts of the country, has fuelled air-conditioner (AC) makers’ hopes for 15-18% growth in volume, according to estimates by industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA).
In the past few years, the industry has grown at just 7.7%. It is expected to grow at a compound annual growth rate (CAGR) of 15% between 2016 and 2020, according to Manish Sharma, president, CEAMA.
Sharma, who is also president and chief executive officer of Panasonic India and South Asia and executive officer of Panasonic Corp., said the industry is betting on the rural market for growth as the country had a “great” monsoon last year.
Firms have already started rolling out new products and campaigns aimed at grabbing a slice of the market. Some have dropped prices.
LG Electronics India, which is aiming at double-digit growth, has dropped prices of inverter ACs by up to 25%, according to retailers in New Delhi.
The South Korean firm, however, attributed the fall in prices to the fact that it is making all inverter ACs in India.
This has forced competitors to go for price cuts across models even though the cost of some components has gone up by as much as 15%.
“Overall, we are targeting double-digit growth this season. Due to the early onset of summer, there is a good momentum and we are expecting a robust season,” said Amit Gujral, head (corporate marketing), LG India.
Mohammed Hussain, business head (air-conditioning group), Panasonic India, said the Japanese firm is betting on its new range of air-conditioners with an inbuilt air purification system and expects a 30% growth over last year. The firm rolled out the new range in February. Panasonic will spend about Rs45 crore this summer to push AC sales, Hussain added.
South Korean firm Samsung India Electronics Pvt. Ltd did not quantify the growth it is targeting.
“Samsung plans to outpace market growth,” said Rajiv Bhutani, vice-president (consumer electronics), Samsung India. This year, the firm is banking on its digital inverter ACs, which it rolled out in February.
Chinese firm Carrier Midea has set higher targets. “We have aggressive plans to grow 50% in sales in 2017. We have good representation across all markets; and with this growth, we are targeting to be among the top 5 players,” said Krishan Sachdev, managing director, Carrier Midea India.
New entrant Groupe SEB India (P) Ltd chief executive Sunil Wadhwa said the local arm of the French company is targeting 35% growth in sales of its summer cooling products that the company terms AC coolers.
India’s appliances and consumer electronics sector is projected to grow at a CAGR of 13.4% to touch $20.6 billion by 2020, according to a study by consulting firm EY and CEAMA.