AC sales dip 15% in April as temperature falls; expected to recover in May

New Delhi: Unseasonal rains in north India during April-end and May beginning have put brakes on sales of cooling products such as air conditioners, refrigerators and coolers, according to industry players.

Customers have delayed the purchase of air conditioners in April and May, which are considered to be the peak season for the industry.

In April, some makers reported around a 15 per cent decline in sales in comparison to the same period a year ago.

However, manufacturers including Panasonic, Godrej and Daikin are hoping that sales for the industry will be back on track as normal summer resumes.

"This year the weather has been usually cool for April and hence we have recorded a lower growth compared to last year. We have seen many customers delay the purchase of ACs as of now," said Panasonic Life Solutions India Business Head, Air Conditioners Group, Gaurav Sah.

However, he also added: "It's a long summer ahead and we are hoping that sales will catch up." According to Consumer Electronics and Appliances Manufacturers Association (CEAMA), the unseasonal rains in the north have temporarily affected sales of ACs, refrigerators and coolers.

While the east and south have seen good growth till April because of no weather disruptions, the west has been flat, said CEAMA President Eric Braganza.

"The month of May will be crucial for defining the season's growth. If the expected increase in temperatures happens, we will see a revival in demand and a rapid reduction in market inventory," said Braganza.

Godrej Appliances Business Head and Executive Vice President Kamal Nandi said there is a strong correlation between temperature rise and the sale of cooling products like ACs, refrigerators, air coolers and deep freezers.

"Heatwave is forecasted in May in most parts of the country and summer is expected to be prolonged, here we can expect the high temperature in June. This should increase demand for cooling categories both in May and June," he said.

Nandi further added air conditioners have now become a necessity more than a luxury and is the fastest-growing category today in the marketplace.

"Our AC sales have also increased substantially," he said.

Notably, the consumption of 5-star rated ACs is rising across all segments like 1-ton, 1.5-ton, 2-ton and window AC as well, he said.

While the frost-free segment within refrigerators continues to show growth as well although the mass end is yet to show strong resurgence.

Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa said: "The AC industry will have growth when heat wave will come."

"It may be for a month. There should not be much concern about it," he said, adding the penetration level in the country is very low and it has a huge market potential for the domestic air-conditioner industry, which is on the cusp of good growth led by the advancement of technology.

The domestic residential air-conditioner market is estimated to be around 8 million units and had a double-digit growth last fiscal.