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This summer, if not the heat, the prices of air-conditioners will certainly make you sweat. Air-conditioner manufacturers will shortly announce another round of price hikes, making air-conditioners costlier by Rs 500 - Rs 1,250.
Voltas, Carrier Air Conditioning, Blue Star and Haier are among those who will make a price revision anywhere from two per cent to six per cent while Korean companies such as LG and Samsung, and Daikin, are not undertaking a price revision.
The increase will be the third such price revision as most companies had resorted to price corrections in October and January citing higher input costs including steel and copper prices and freight charges.
Price hike in April
“There has to be another round of price hike in April. We had undertaken a price hike in January. Input costs, especially copper, are still high and we are forced to revise prices by three per cent,” Mr Pradeep Bakshi, Chief Operating Officer, Voltas India, said.
Additionally, Voltas noted that air-conditioner buying is still to kick off in northern India. “Summer is delayed this year and compared to the February-March period last year, there is almost a 20 per cent dip in sales,” he added.
Blue Star, which is focused on both domestic and institutional air-conditioning, said it too has increased prices by 2.5-4 per cent earlier this month. “Due to speculative demand, commodity prices have gone through the roof and profitability has been hit in the last three quarters,” said Mr B. Thiagarajan, President, Air-Conditioning and Refrigeration Products Group, Blue Star Ltd.
Industry watchers and commodity trackers note that the prices of copper, a key component in air-conditioners, has almost tripled on London Metal Exchange from $5,000 to $9,345 per tonne in the past two years. “With every $1,000 increase in copper prices, the price of air-conditioners moves up by one per cent. It is highly speculative. Also with the Japan crisis, steel prices are likely to move north,” they point out.
The air-conditioner market in India is estimated at 3.8 million units and is poised to grow 30 per cent. In 2010, the split air-conditioner segment grew almost 60-70 per cent compared to window air-conditioners owing to technology and changing buying behaviour of consumers.
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