AC makers clock two-fold jump in sales in May amid scorching summer

A blistering summer has led to an almost two-fold jump in sales of air-conditioners in May even as leading manufacturers have been grappling with delays in installation and replenishing inventories of hot-selling energy-efficient models.

The mercury is hovering above 45 degrees at several places including the national capital, which has been under the grip of a severe heatwave for the past few days. At the same time, AC makers are navigating exceptional demand, recording their best-ever sales in a month so far.

Leading brands like Voltas, LG, Daikin, Panasonic, and Blue Star witnessed robust sales in May and the industry expects an overall growth of 30 to 35 per cent in 2024 compared to their sales of last year. Voltas recorded a two-fold jump in the sales of residential AC in May and expects the positive momentum to continue in the remaining period of the April-June quarter, said its MD & CEO Pradeep Bakshi.

"As we reflect on May 2024, Voltas has a remarkable surge in sales, showcasing a stupendous volume growth of 100 per cent compared to the same period last year. This milestone is particularly significant as May historically stands as one of the highest contributing month in the AC and cooling products industry," Bakshi told PTI.

The Tata Group firm is optimistic to achieve 2 million units of Ac sales mark within the first six months of this calendar year. Similarly, LG Electronics India said it is witnessing an "exponential growth" in room AC business and has "surpassed the last 5 years' records with a multi-fold surge in demand".

"This year created many sales records starting from the south region and now North India. We are expecting a minimum 100 per cent growth in north India. Similar growth trends are expected to be seen in eastern states also," said LG Electronics India Senior VP Sanjay Chitkara.

The company is "bullish on AC sales" as temperature is continuously rising, he added. Blue Star Managing Director B Thiagarajan said in March this year the room AC industry had a 40 per cent growth and it was expected that due to general elections in May, there will be some hiccups in the market but it did not happen.

"In April the demand went skyrocketing. Then we thought that it would slow down in May but it did not because of sales from the northern region," he said adding that the industry sales are up 70 per cent.

In May due to high sales, "Installation delays are happening and the service calls are unprecedented. This is because of heat and the industry was never prepared for such kind of growth," he said. 

According to Thiagarajan, this is a "golden period" for the industry, in which it will have over 35 per cent volume growth in 2024. 

Daikin India Chairman and Managing Director Kanwaljeet Jawa said: "The challenge in the market is how many units you can produce and supply. That's the absolute challenge." According to Jawa, Daikin's sales in May were 60 to 70 per cent higher than the last year and the company expects 35 to 40 per cent growth in the first quarter of FY25.

He added that last year in May, sales were slow due to rains in some parts of the country. Similarly, Panasonic India has also recorded an "exponential" growth for the AC category this summer.

"In the month of May we recorded the highest-ever 52 per cent increase in sales compared to last year," said Abhishek Verma, Panasonic Life Solutions India Business Head, Air Conditioners Group.

The company has witnessed a growing popularity of 5-star inverter ACs, which contribute to 55 per cent of its online AC sales.

However, Jawa also warns about a possible price hike that the industry may take. The price of copper has gone up substantially in the global market and markers will pass on this to consumers.

According to Thiagarajan, there are probabilities of early rains in June, which may slow down the sales.

"Moreover, the Chinese market has revived, so the raw materials prices are also going up significantly," he said.