Air-conditioner prices are set to go up anywhere between 15 and 20 per cent this summer. According to industry sources, it is because of a combination of factors such as the dollar-rupee volatility and pressure on input cost. In the split AC category, the increase could be even more pronounced as there will be an additional cost of upgrading involved.
Upgrades add to burden
Effective January 2012, the Bureau of Energy Efficiency has upgraded the energy standards of split air-conditioners to a higher level in line with the ‘Energy Conservation' programme. All the star-rated split units will have a higher energy efficiency ratio as compared to the same star units last year. As a result, the unit which was ranked 5-star will become 4-star this year. “This will involve an additional investment in R&D and increased input cost, which will add to the retail price,” explains Mr K.J. Jawa, Managing Director, Daikin India.
Companies such as LG and Blue Star, which have already launched their 2012 models, have increased prices by around 15 per cent. This may go up further as summer approaches, say industry sources.
Mr B. Thiagarajan, President (Air-Conditioning & Refrigeration Products Group), Blue Star Ltd, says the price increase is more because of the depreciating rupee against the dollar. Almost all AC manufacturers in India import at least 65 per cent of the components – from compressors, control switches and copper to even plastic parts, in most cases. Even the FTA (free trade agreement) between India and countries such as Thailand does not allow import of components from those countries at zero duty.
For example, the new range of air-conditioners that are launched by different players in the market sport price tags upwards of Rs 19,500 for a 1-tonne unit, as against Rs 17,500 last year.