Companies

AC makers brace for challenging times, hope demand will pick up as temperature soars

Meenakshi Verma Ambwani New Delhi | Updated on March 19, 2020 Published on March 19, 2020

Retailers have stocked up products, but with malls shutting down many of them have to suspend operations, say companies   -  K Pichumani

Closure of malls, other public spaces a concern, say players

Bracing up for the challenges thrown by the coronovirus pandemic, AC makers have decided to enhance hygiene protocols on the retail front, with hopes that consumer sentiment will improve as summer season hits the peak.

With many state governments directing malls to shut down, players said they are closely monitoring the fast-evolving dynamics of the situation.

Krishan Sachdev, Managing Director, Carrier Midea India Private Ltd, said the company is taking all essential measures to ensure safety of its employees and retail associates in compliance with the government’s directives. The company provides masks and gloves, and ensures regular body temperature checks for all its customer-facing associates, including technicians.

‘Evaluating the situation’

“Following the coronavirus outbreak, the overall industry is collectively facing challenging times with numerous developments such as the closure of malls and other public spaces and facilities. As the situation continues to evolve, we are still seeing some sell out happening in certain regions of the South and the East. We believe that if the situation gets better by mid-April and once the summer onset intensifies, there will be a demand spike. However, should we not see much positive development by May, it may be a cause of concern for the AC industry,” Sachdev said, adding that the company is evaluating the situation and is hopeful of a positive outcome. Despite challenging supply side situation in China from the start of the year, key players had managed to enhance dispatches for AC components, in a bid to manage the summer season demand.

Retailers typically begin stocking on AC inventories much ahead of the summer season. However, in the past two weeks the situation has changed dramatically.

Santosh Salian, Product Group Head-Air Conditioners, Godrej Appliances, said, “While the industry is bracing for the impact due to coronavirus outbreak, the onset of summer season has also been delayed compared to last year. Retailers are stocked up with products, but with malls shutting down, many of them have to suspend operations. While there may not be a dip in tertiary sales once they resume operations, a sell out is expected as summer temperatures surge. But for manufacturers this will mean missing out on an inventory turn of 30 days which will impact primary sales. We are closely monitoring the situation.”

Hygiene guidelines

LG Electronics India has launched a heath and hygiene drive across all its brand shops across the country with focus on product and store cleaning every hour. Vijay Babu, Vice-President, Home Appliances and AC at LG India, said, “We have decided to implement health and hygiene guidelines across all our brand shops which includes mandatory use of hand sanitisers and masks and adoption of social distancing for the safety of retail associates as well as customers. While malls are shutting down, the standalone retailers are operating but footfalls have come down. However, we are not compromising on quantities of AC product range and we believe the sell-out will improve.”

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Published on March 19, 2020
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