Rise in price slows down demand for ACs
Updated: May 21, 2014 03:29:34pm
New Delhi, May 21 (KNN) Demand for residential and commercial air conditioners had dipped this summer by 10-20 per cent owing to rise in prices, said a study report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“The factors for down-swing have been attributed to rise in prices, slowed demand for consumer durable and high interest rates in air conditioners (AC) market, the study report said.
In the report titled “AC makers feel the heat this season- An Analysis”, the industry body said the demand has been sluggish primarily due to the fact that majority of the players hiked rates by up to 20 per cent.
AC manufacturers have not yet received the benefit as the demand for residential and commercial ACs are still down by 10 per cent and 20 per cent respectively in the first four months.
According to the findings, the prices of ACs have increased due to the star rating regime, the market has seen de-growth of 15 per cent in volume in the first four months (January-April 2014) as compared to the same period last year.
The current domestic market size of AC industry is estimated to be around Rs 7,500-8,000 crore. The consumers seem to be focusing more on energy efficient products that have value proposition and also have differentiated features, it said.
The price hike has also hit sales in rural and semi-urban market, which account for about 35 per cent of total sales, it said.
The overall room AC market in India is estimated at 4.5 million units last year and is valued at Rs 7,500 – 8,000 crore. It is growing at over 30 per cent annually. Split ACs, at present, dominate the AC industry with more than 69 per cent of all units sold last year.
Other home appliance makers have also increased their prices by 20 per cent from this month onwards, the report said.
"The factors favouring the Indian air-conditioner market growth are changing lifestyles, rise in disposable incomes and ease of availability which will aid this growth. Besides, most people are now using air-conditioned cars, working in air-conditioned environment and becoming conscious about hygiene and pure air, added the paper.
It further points out that star rates, energy efficient models with superior features will continue to rate high on consumer demand. Gaining from ongoing technological advances they have been transformed into products that can provide health benefits as well. (KNN/ST)
“The factors for down-swing have been attributed to rise in prices, slowed demand for consumer durable and high interest rates in air conditioners (AC) market, the study report said.
In the report titled “AC makers feel the heat this season- An Analysis”, the industry body said the demand has been sluggish primarily due to the fact that majority of the players hiked rates by up to 20 per cent.
AC manufacturers have not yet received the benefit as the demand for residential and commercial ACs are still down by 10 per cent and 20 per cent respectively in the first four months.
According to the findings, the prices of ACs have increased due to the star rating regime, the market has seen de-growth of 15 per cent in volume in the first four months (January-April 2014) as compared to the same period last year.
The current domestic market size of AC industry is estimated to be around Rs 7,500-8,000 crore. The consumers seem to be focusing more on energy efficient products that have value proposition and also have differentiated features, it said.
The price hike has also hit sales in rural and semi-urban market, which account for about 35 per cent of total sales, it said.
The overall room AC market in India is estimated at 4.5 million units last year and is valued at Rs 7,500 – 8,000 crore. It is growing at over 30 per cent annually. Split ACs, at present, dominate the AC industry with more than 69 per cent of all units sold last year.
Other home appliance makers have also increased their prices by 20 per cent from this month onwards, the report said.
"The factors favouring the Indian air-conditioner market growth are changing lifestyles, rise in disposable incomes and ease of availability which will aid this growth. Besides, most people are now using air-conditioned cars, working in air-conditioned environment and becoming conscious about hygiene and pure air, added the paper.
It further points out that star rates, energy efficient models with superior features will continue to rate high on consumer demand. Gaining from ongoing technological advances they have been transformed into products that can provide health benefits as well. (KNN/ST)
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