AC industry sees 50% growth in three months due to extreme heat; parts have to be ordered by air

Sales of air conditioners (ACs) have surged to all-time highs due to the intense heat experienced by most of the nation. Compressors, cross-flow fans/motors, and PCB circuits must be airborne imported by AC manufacturing businesses in order to satisfy the spike in demand.

Daikin Air Conditioning India Chairman and Managing Director (CMD) Kanwaljeet Jawa said, that due to extreme heat, the domestic AC industry has seen a growth of about 50 percent in the last three months. This is much more than expected. This is definitely a very encouraging situation for the industry. However, companies are facing a shortage of spare parts as compared to the increased demand for ACs.

Java said, to meet this shortage and maintain their production and supply chain, AC manufacturing companies are having to import spare parts in an emergency from global suppliers in countries like China, Taiwan, Thailand, Japan, and Malaysia by air.  Freight through traditional sea routes usually takes more time.

The Consumer Electronics and Appliances Manufacturers Association (CEAMA) estimates that due to the scorching heat, AC sales may reach a record level of 1.4 crore units this year. The organization's president Sunil Vachani said, that rising temperatures and hot winds have now made domestic ACs an essential need in urban areas. Indian residential air conditioner sales are expected to increase to about one to 1.11 crore units.

Some companies have raised the price of ACs by four to five percent due to the increasing demand and rising prices of metals like copper and aluminium. The head of Godrej Appliances Business and executive vice president, Kamal Nandi, stated that copper and aluminium prices have gone up by 20%.

Blue Star Managing Director B Tyagarajan said the industry is ready for a growth of 25-30%. No one had expected a 70-80% increase in demand. He said, the number of ACs sold in a year, was sold in three months this season. AC sales grew by 40% in March, 80% in April and 70% in May. It will see another 70% increase in June. In view of this growth, companies are trying to produce as much as possible and are importing components by air.

AC companies said the industry does not have adequate stock of such components as an ecosystem is still in the process of being created in India under the Production Based Incentive (PLI) scheme. This is affecting AC production. Due to a lack of stock to meet demand, AC installation is taking a week or more at many locations.