Plan to mitigate the scorching summers with a cool new air conditioner (AC)? Well, be prepared to shell out more as AC and refrigerator manufacturers turn up the heat.
Consumer electronics companies cite high input costs for cranking up the prices of ACs and refrigerators by about three to five per cent.
"The input cost has gone up considerably. Till now we have been holding the price but then we can hold price only to some extent. We are looking at a price hike of three to four per cent for both refrigerators as well as air conditioners," Eric Braganza, president, Haier India, told Mail Today.
Tata Group firm Voltas, which hiked prices in January, said it will go for another price increase which is expected to be implemented by mid- April.
According to Pradeep Bakshi, chief operating officer (units products business group) Voltas Ltd, "Prices of air conditioners had gone up already by five per cent owing to the high prices of copper and other metals. We increased prices during January. There will be a second round of price increase by almost three per cent."
Other companies like Samsung and Electrolux have also hinted at price hikes in a similar range. However, companies do not expect any slump in demand due to the price hike and expect to see a growth of 20- 35 per cent in sales.
According to industry projections, the AC market was estimated to be around three million units in 2010 and this year the market is likely to grow by 20 per cent and touch 3.6 million units.
In 2010, the split AC market grew by almost 60-70 per cent compared to window ACs.
Similarly, the market size of refrigerators was nine million units in 2010 and is estimated to grow to 12 million units in 2011.
Consumer electronics companies are planning to cash in on the demand with new product launches in these categories.
Samsung has launched 14 new split AC models and four new window AC models this year, while Voltas launched 70 models.
Similarly, Haier has introduced a number of new AC and refrigerator models, which boast of better features and a wider price range.
Companies expect to achieve a good 35-40 per cent growth in the sales of split ACs.
Ravinder Zutshi, deputy managing director, Samsung India, said, "With our differentiated service offers and our innovative marketing campaigns, we are expecting to achieve 35- 40 per cent growth in our split AC sales in the year 2011."
"We expect our split AC sales to contribute around 80 per cent of our total AC volumes this year," Zutshi said.
The growth targets projected by other companies are also in a similar range.
"I don't think that the demand will be going down because the price hike is across the board and ACs and refrigerators are no more a luxury but a necessity. We expect a very healthy growth in these segments," Braganza said.
Voltas said it expects a 50 per cent jump in AC sales by the end of the next fiscal at 12 lakh units.
Courtesy: Mail Today