Will the market for window ACs die down soon? It's a split verdict. Some players say it may happen over five years, some say it will take much longer. And there are some who believe the window segment will never go away.

Samsung India recently announced its exit from the window segment from 2012 “in tune with the industry trend of shrinking sales”. According to Mahesh Krishnan, Vice-President (Home Appliances), in the approximately 3.2-milion-unit AC market in India, the share of split AC sales is over 75 per cent. “It's only a matter of time before window ACs make a total exit,” he said.

For Samsung, he said, split ACs accounted for 85 per cent in 2011, and “this year it will be 100 per cent”.

Rival Korean brand LG, however, has no such plans “as there is still a market for them”. Currently for LG, split models account for 70 per cent of sales.

Gone are the days when the demand for split ACs came only from the institutional segment or affluent homes. With the price difference between the window and the split models narrowing, people are migrating to split ACs. It is also because of their lower noise levels and aesthetics, says Kothandarama Setty, Chairman of the South-based durables retail chain Vivek's.

K. J. Jawa, Managing Director of Japanese AC major Daikin India, says window ACs are here to stay in India. Its market share in terms of percentage might shrink further, but in absolute terms, it will still grow, he says. Pointing out that AC penetration in India is pretty low, at a little over 3 per cent, as the category penetrates newer markets, sales will sway in favour of window models. “It is more probable that the first-time buyer in tier II and tier III cities and even smaller towns will prefer window ACs to split ones,” he says. According to him, even after years, the market share of window ACs will hover around 10-15 per cent. The irony here is Daikin is not present in the window AC market as it wants to play only in the premium segment in India.

The home-grown brand Voltas too voices the same opinion. Its Executive Vice-President and COO Pradeep Bakshi says, “All said and done, window models are at least Rs 4,000 cheaper than a similar star-rated split model. It's still big money,” he says.

The energy fix

New energy standards for split ACs may see window models stay on in the picture as manufacturers may be loath to make high investments needed to meet the norms. Even as the window models have been left untouched, effective January 2012, the Bureau of Energy Efficiency has upgraded the energy standards of split air-conditioners to a higher level. All the star-rated split units will have a higher energy efficiency ratio as compared to the same star units last year. As a result, the unit which was ranked 5-star will become 4-star this year. This involves an additional investment in R&D and increased input cost, which will add to the retail price of the split model. So, notionally, the 5-star window model is still way cheaper than its ‘split' counterpart, says Bakshi.

The other advantages of window models are ease of installation and mobility. People in rented houses, and those who have transferable jobs would surely prefer window ACs, says B. Thiagarajan, President (Air-Conditioning & Refrigeration Products Group), Blue Star Ltd. “If you ask me, I would say window AC will be there for at least another five years, till the Indian AC market goes past the 10-million-unit mark.” According to him, the National Capital Region is the biggest market for window ACs.

However, he observes, that there may not be any new feature-rich models in the window segment. “It's a very difficult task to squeeze in every feature into the square box that would fit into your window,” he says. And, no company may invest in R&D to improve the category further as it may not be there in the market in the long term.

So, looks like the air conditioner is not going out of the window as yet.

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