AC makers betting on consumers’ shift to inverter models

In line with the global trends, air-conditioner makers are betting big on the Indian market beginning its shift towards inverter air-conditioners from regular or the fixed speed ACs.

With the new energy efficiency ISEER rating set to kick-in from next year, which will make energy efficiency parameters even more stringent, most players are working on making their inverter AC product portfolio more robust this summer season.

One of the leading players, LG India has completely shifted to making inverter split-ACs and stopped manufacturing regular split ACs.

For some of the other key players such as Daikin India, inverter ACs contributes nearly 25-30 per cent of their sales in this segment currently.

Kanwal Jeet Jawa, CEO and MD, Daikin India, said: “The Indian market is definitely at an inflection stage for inverter ACs. The share of inverter ACs is expected to grow significantly in the next three to four years.”

Factors such as government regulations and energy-saving benefits has led global markets to rapidly shift towards inverter ACs. Inverter ACs contributed about 63 per cent to the global sales in 2016.

In mature markets such as Japan, Australia and the US, the share of inverter ACs is much higher. Kamal Nandi, Business Head & EVP, Godrej Appliances, said: “We believe the share of inverter ACs is expected to grow to about 15 per cent this year from about 8-10 per cent currently. Next year, we will be seeing an even bigger shift and inverter ACs could contribute as much as 25-30 per cent.”

In a bid to push the consumers to shift towards inverter ACs, companies are also working towards reducing the price gap between entry-level inverter ACs and 5-star regular ACs.

However, other industry players believe this may not be sustainable in the long-term and the real reduction in prices is expected to come in only once the volumes for inverter ACs pick up. Overall, the Indian AC sales are expected to grow by about 15-20 per cent this year.

Kapil Agarwal, Vice-President, Marketing at Whirlpool India, added that while the industry is pushing inverter ACs in the market it all depends on consumer preferences.

“With low penetration levels for ACs in the country, the industry has been seeing good growth rates since the past two years. The growth of the market depends on affordability of products, besides sustainable growth strategies. A bigger shift towards inverter ACs is expected to be seen next year,” he added.