New Delhi, Air conditioning manufacturers in India are airlifting components such as compressors, cross flow fans/motors and PCB circuits to meet the surge in demand due to the ongoing scorching heat in most parts of the country, leading to a surge in AC sales. There has been a rise. Record numbers, industry players said.
Companies are sourcing emergency-airlifting components from global suppliers from several countries such as China, Taiwan, Thailand, Malaysia and Japan to keep their production and supply lines intact as traditional delivery via sea freight takes longer.
Some players have increased the prices of metals like copper and aluminum by 4-5 per cent, passing on the burden of rising prices to customers.
Additionally, installation in many locations is taking a week or more as the existing service network is unable to deal with new connections or service requests, some players said.Kanwaljit Java, Chairman and Managing Director, Daikin Airconditioning India, said the room air conditioning industry has witnessed a growth of nearly 50 per cent in the last three months, which is beyond expectations.
"For some components, some companies had shortages and may have had to airlift them, but the industry is certainly in a very bullish mood," Java said.
Players said the industry does not have that kind of component backup as an ecosystem is still being built in India under the PLI scheme.
Blue Star managing director B Thiagarajan said the industry was prepared for a growth of 25-30 per cent and no one had planned for a 70-80 per cent increase in demand.
“When growth is 70-80 per cent, there will be shortage,” he said.You have to either fly on a plane or give up the sale, that's true." "What the industry sells in a year, it has sold in three months this season," he said.
He said, “The growth rate was 40 percent in March, 80 percent in April and 70 percent in May. June will see a growth of 70 percent.,
Therefore, companies are trying to do more manufacturing and airlifting of components, which is common in the industry.
According to an industry insider, a company typically maintains an inventory plan of three months' advance production, which is typically shipped via sea freight. However, due to the sudden increase in demand, emergency air services have started.
The room AC industry is still dependent on imports, which dominate the product value on an average by about 60-65 per cent.
“The industry imports compressors, PCBs, fan motors,” Java said.It also imports copper and aluminium,” Java said, adding that it “comes from markets like Taiwan, China, Thailand, Malaysia. So these are the main markets”.
Asked if Daikin also airlifted components, he said, "Luckily we were one step ahead. We had set up our own manufacturing facility in Sri City which helped us a lot on the compressor front. And At the same time, NIDEC Corp., which is a Japanese company, had built a motor factory right in front of our factory.,
However, Daikin faced some problems with PCBs (printed circuit boards) and some small components that were airlifted from Japan.
On the increase in prices, Jawa said that metal prices have increased and the prices may increase by 2-3 percent.
Kamal Nandi, business head and executive vice president, Godrej Appliances, said the prices of copper and aluminum have increased by 20 per cent.
“We managed to maintain prices in Q1 as most of the raw materials were ordered in Q4. However, materials ordered in Q1 for Q2 production will be at higher prices, so prices increased by 2-3 percent. There is a possibility, especially in AC and refrigerator.Due to their high copper and aluminum content,” he said.
Thiagarajan said the room AC industry makes summer plans in November and stocks are prepared. Since one year's stock has been sold in the last three months and the material has been sourced at a higher price, obviously the price will increase.
He also predicted that festive demand would be low this year.
Industry body CEAMA has estimated the Indian AC industry to be around 14 million units this year.
Companies are sourcing emergency-airlifting components from global suppliers from several countries such as China, Taiwan, Thailand, Malaysia and Japan to keep their production and supply lines intact as traditional delivery via sea freight takes longer.
Some players have increased the prices of metals like copper and aluminum by 4-5 per cent, passing on the burden of rising prices to customers.
Additionally, installation in many locations is taking a week or more as the existing service network is unable to deal with new connections or service requests, some players said.Kanwaljit Java, Chairman and Managing Director, Daikin Airconditioning India, said the room air conditioning industry has witnessed a growth of nearly 50 per cent in the last three months, which is beyond expectations.
"For some components, some companies had shortages and may have had to airlift them, but the industry is certainly in a very bullish mood," Java said.
Players said the industry does not have that kind of component backup as an ecosystem is still being built in India under the PLI scheme.
Blue Star managing director B Thiagarajan said the industry was prepared for a growth of 25-30 per cent and no one had planned for a 70-80 per cent increase in demand.
“When growth is 70-80 per cent, there will be shortage,” he said.You have to either fly on a plane or give up the sale, that's true." "What the industry sells in a year, it has sold in three months this season," he said.
He said, “The growth rate was 40 percent in March, 80 percent in April and 70 percent in May. June will see a growth of 70 percent.,
Therefore, companies are trying to do more manufacturing and airlifting of components, which is common in the industry.
According to an industry insider, a company typically maintains an inventory plan of three months' advance production, which is typically shipped via sea freight. However, due to the sudden increase in demand, emergency air services have started.
The room AC industry is still dependent on imports, which dominate the product value on an average by about 60-65 per cent.
“The industry imports compressors, PCBs, fan motors,” Java said.It also imports copper and aluminium,” Java said, adding that it “comes from markets like Taiwan, China, Thailand, Malaysia. So these are the main markets”.
Asked if Daikin also airlifted components, he said, "Luckily we were one step ahead. We had set up our own manufacturing facility in Sri City which helped us a lot on the compressor front. And At the same time, NIDEC Corp., which is a Japanese company, had built a motor factory right in front of our factory.,
However, Daikin faced some problems with PCBs (printed circuit boards) and some small components that were airlifted from Japan.
On the increase in prices, Jawa said that metal prices have increased and the prices may increase by 2-3 percent.
Kamal Nandi, business head and executive vice president, Godrej Appliances, said the prices of copper and aluminum have increased by 20 per cent.
“We managed to maintain prices in Q1 as most of the raw materials were ordered in Q4. However, materials ordered in Q1 for Q2 production will be at higher prices, so prices increased by 2-3 percent. There is a possibility, especially in AC and refrigerator.Due to their high copper and aluminum content,” he said.
Thiagarajan said the room AC industry makes summer plans in November and stocks are prepared. Since one year's stock has been sold in the last three months and the material has been sourced at a higher price, obviously the price will increase.
He also predicted that festive demand would be low this year.
Industry body CEAMA has estimated the Indian AC industry to be around 14 million units this year.
