Heatwave to lift AC sales to record, but supplies from China delayed

Power demand has also hit a record high as India registered its hottest March in more than a century and an unusually hot April
Last Updated : 17 May 2022, 12:25 IST
Last Updated : 17 May 2022, 12:25 IST

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Indian air conditioner manufacturers are expecting record sales this year as a heatwave scorches most of the country, an industry body told Reuters, but delayed arrivals of components from Covid-hit China may cause shortages of premium products.

With temperatures this month breaching 49 degrees Celsius in New Delhi, sales are set to reach 8.5-9 million units this year, up from 2019's previous record of 6.5 million, the head of the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said.

"The market has been extremely good because this year, we got the heat in the second half of March rather than April," CEAMA President Eric Braganza, formerly the India head of China's Haier Appliances, said on Tuesday.

Power demand has also hit a record high as India registered its hottest March in more than a century and an unusually hot April.

"Because of the (Covid-19-related) issues in China, it is taking longer for supplies to reach," Braganza said. "As a result, and with a surge in demand, we've seen that energy-efficient conditioners are what are in short supply."

Braganza, whose association members include Voltas Ltd , Whirlpool of India Ltd and Havells India Ltd, said deliveries of parts from China are now taking 60-90 days, up from 45 days normally.

Indian companies depend on China for 10 per cent to 20 per cent of AC components like compressors and controllers. Energy-efficient AC sales would mostly be affected because other products largely use locally made components, Braganza said.

Blue Star Ltd, one of India's best-known AC sellers, told a conference call this month that it had doubled the inventory for some items like semiconductors to 90 days due to a "mad rush to block the quantities from the vendors".

Voltas, a unit of India's Tata conglomerate, said it was reliant on imports for only a few components as it has been trying to increase localisation over the years.

But it added that given the surge in demand in March and April, some products could be in short supply.

Braganza said that later in the year, the dollar's appreciation and a rise in raw materials costs also meant manufacturers may be forced to increase prices.

The Indian rupee hit a record low of 77.7975 on Tuesday.

"We will have to really cross our fingers and wait and watch what happens from July to December," Braganza said.

Published 17 May 2022, 12:25 IST

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