Saturday, July 20, 2024

AC annual sales to grow 25% till ’28: Blue Star MD

New Delhi: India’s air conditioner market is in a high growth phase and is expected to grow 25% annually for at least five years, Blue Star managing director B. Thiagarajan said.

“It is in the cusp of an explosion. We have entered a period where it will grow by 25% per year, at least, for five years. The industry sold about 8 million units last financial year and is set to cross 10 million this fiscal year,” Thiagarajan said.

The Centre’s productivity-linked incentive schemes will assist the growth of air conditioners, and lead to price wars among companies and this will bring down prices.

“Under PLI scheme, a company can’t claim incentives unless it sells ACs. So, incentives are linked to my production as well as sales. To make sales happen, companies will get competitive and offer discounts to be able to sell it, and thus, more sales.”

Energy-efficient AC is also contributing to the increase in sales, he added. “Earlier, an AC would consume 100 units of electricity , now it consumes 15 units for similar usage on the back of energy efficient rules.”

About 95% of the AC market is of first-time buyers and 65% is in tier 3, 4 and 5 cities.“That dynamics is set to change and the industry will see contributions from repeat buyers increasingly.”

Though there’s no authentic data on average age of buyers, one thing is certain that the average age is down to 35-40 years in recent times and their percentage is rising every year.

Contribution of smaller cities is also set to grow and it will be further aided by ‘affordable air conditioners’. As part of the initiative, Blue Star launched affordable products, which will not only help increase volumes but also increase its market share. On Wednesday, the firm unveiled its new comprehensive range of ACs including a best-in-class affordable range as well as a flagship premium range, for this summer. “We must offer affordable ACs to gain market share,” he said.

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