Business Today

AC sales soar on wedding season rush

The price hikes implemented by many companies added to the impact of the delayed summer on the AC market, which is estimated to be around 3.5 million units this season.

Nishi Rath   Mumbai     Last Updated: May 12, 2011  | 12:42 IST

Air-conditioner (AC) manufacturers are banking on an extended summer, festivals and the marriage season to prop up sales after the delayed rise in the mercury led to a slowdown in sales in April.

"Consumption had gone down in April but with temperatures soaring, May promises to be a good month for us," said Kamal Nandi, vice-president (sales and marketing), Godrej Appliances, which has rolled out 42 models of ACs this year.

"We had targeted a growth of 50 per cent this summer but as April was a washout for cooling products we don't think we can reach the set target. However, we hope to grow by 30 per cent," he said.

Sales have increased, confirmed a leading dealer on condition of anonymity. "Yes, the demand was low last month, but just before Akshaya Tritiya we saw customers pouring in to buy ACs. The marriage season has also given sales a boost," said the dealer.

COOLING SUMMERS WITH HOT SALES

Godrej Appliances has rolled out 42 models of ACs this year

Godrej had targeted a 50 per cent growth this summer but is now likely to grow by 30 per cent

The marriage season has given a boost to AC sales

Price hikes by many AC manufacturers added to the impact of delayed summer on AC market

LG, which has hiked prices of its products, says it has seen a rise in the demand for ACs

LG has rolled out 51 new AC models this year

However, many people are opting for low-range and locally made ACs rather than brands to avoid huge expenditure
The price hikes implemented by many companies added to the impact of the delayed summer on the AC market, which is estimated to be around 3.5 million units this summer, according to industry sources.

"Two things affected AC sales in April - a delayed summer and a rise in prices by certain companies. However, as the temperature has gone up tremendously, people do not have any choice but to add a few thousands to their budgets and buy an AC," said another dealer.

LG, which has recently hiked the prices of its products, claims to have seen a rise in the demand for their ACs.

"There has been a steep rise in the cost of raw materials used in consumer electronics and durable product. Hence, the cost of our products has increased by five per cent. However, LG is trying to keep price increases to a bare minimum and absorb a major portion of the rise in input costs through internal efficiencies," said Ajay Bajaj, business head (air conditioners), LG Electronics India Pvt Ltd.

Bajaj said the sale of ACs is picking up rapidly. "There has been a delay in the onset of summer but we are still expecting peak summer in May," he added.

ACs are considered a necessity and not a luxury these days, said Bajaj. Hence, LG does not expect a dip in demand due to weather changes. The company has rolled out 51 new AC models across the split and window AC categories.

However, many people are opting for low-range and locally made ACs to models from big and established brands, said the dealer. "They do not want to spend unnecessarily on something that can be bought at a low price," he said.

Courtesy: Mail Today

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