Amid scorching heat in most parts of northwest and central India, consumer durables firms expect record demand for cooling products such as air conditioners and refrigerators this year, while another round of price hikes amid rising raw material costs is big.
Major manufacturers also expect demand growth from the last two summer seasons, which saw severe market disruption due to the pandemic, and rising demand for air conditioners in Tier 2 and Tier 3 cities, achieving growth of up to 35%. To help. Last year.
“As we all know the pandemic was very hard on the business for both the industry and the brand. But as soon as the pandemic started coming under control, things started to show up. This year we are targeting a growth rate of over 20% in 2019 for Room AC as well as Commercial AC segment… Supported by various factors like remote working, harsh heat and increasing purchasing power of consumers ,” said Gurmeet Singh, CMD, Johnson Controls-Hitachi Air Conditioning India.
Echoing similar views, Deepak Bansal, Vice President – Home Appliances and Air-Conditioners, LG Electronics, India said Hindu The last quarter has been very promising for the firm due to good demand for air-conditioners and refrigerators. “The industry is witnessing unprecedented demand for ACs due to the heatwave in India. In 2022, we expect the home appliances segment to grow by over 30%, supported by strong growth in cooling products in the first half of the year,” he said.
Mr Bansal said that while the prolonged heatwave has certainly spurred the demand for cooling products, there is also a great demand for their smart home devices backed by artificial intelligence. In 2021, the company saw strong growth of over 20% in the home appliances and air conditioner segment, registering a revenue of ₹15,000 crore.
Panasonic India & SA Chairman and CEO Manish Sharma said, “This year, the company is expecting strong sales across segments, mainly due to the slowdown in demand from last year. “We have seen record growth for ACs this March, which is due to the increase in demand. We have registered a growth of around 142% in the month of March 2022 versus March 2019. We anticipate an overall growth of 30-35% this summer for ACs as compared to last year,” he said.
For refrigerators also, Panasonic has witnessed a growth of 11% as compared to FY19 and is expected to grow at 10-12% this year as well.
However, increased demand may also lead to shortages of these products, as manufacturers are already facing supply constraints and there is a possibility of another round of price hikes due to rising material and logistics costs.
“With rising demand, there has been increased pressure on resources common to the industry. Globally, the supply chain is feeling the strain. Adding to the challenge, is the rise in the cost of raw materials, transportation and other inputs. Brands are constantly on the lookout for these factors. Trying to work around the clock and give the best possible solution to the consumers,” Mr. Singh said.
When asked whether there is a possibility of further hike in prices, he said that input cost is undoubtedly rising, and brands try to rationalize costs as much as possible and develop state-of-the-art technology which will be long lasting. generate solutions. But since the factors which are making the acting cost are beyond the brand control, some of the cost has to be translated to the consumers.
Panasonic has increased the prices of its air conditioners by about 6-8% in January 2022, and is “evaluating changes in input costs before deciding on another price hike”. LG Electronics is also “closely monitoring the situation” as the increase in raw material costs has been unprecedented.
Saurabh Baisakhia, President, Appliances, Usha International said, the company is witnessing a steady rise in demand for cooling appliances as summers have started earlier than expected, and many regions of India are already facing extremely high temperatures. Is. However, he added, “the cooler industry is under pressure due to increase in commodity costs across the board since last year and prices have increased by 5-8%”.