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Consumer durable majors are keeping an anxious eye on the weather. Yet another cool summer is giving them sleepless nights, as air conditioner sales refuse to take off.
Mr. Shantanu Das Gupta, Vice President, Whirlpool, says, “Our April sales are lower than expected since the summer hasn't really kicked in.”
Last year, there was a shrinkage of 35 per cent in air conditioner sales. This year too, the industry appears to be headed for a slump.
Between end March and mid-April, Panasonic India estimates it saw an opportunity loss of 15,000 to 20,000 air conditioners due to a rather cool season.
Mr Kamal Nandi, Executive Vice President (Sales & Marketing), Godrej Appliances, says, “Air conditioning business has not been good primarily because of poor weather conditions and tightening of energy labels, which has increased the cost of 5 star-rated air conditioners.”
Rising prices
To top it all, the prices of air conditioners have gone up by 15 per cent. And discounting is not an option for the companies, which are still reeling under the combined impact of rupee depreciation, higher input costs and export contraction due to a global slowdown.
“Discounting will work only when consumers have sufficient disposable income,” points out Mr Das Gupta. Excise hikes and rising inflation mean that consumer's disposable income is under a tight belt.
Though they rule out discounts, the companies are doling out incentives to push sales. For instance, beginning April, Godrej has been giving away free induction cookers along with air conditioners, the offer being valid till May end.
Samsung is offering triple zero finance offers for select AC models on a pan-India basis. The offer translates into zero initial payment, processing fee and interest.
Mr Mahesh Krishnan, VP-Home Appliances, Samsung India, admits that the delayed start to the summer did impact AC sales in April, but he says there has been a pick up in May.
Rival Voltas also has no price discounts on offer considering increased input costs. But like Samsung, it is offering triple zero finance offers. While Voltas claims to have secured a positive summer run, the company spokesperson said, “Going forward, months of May, June and July are crucial in terms of closing peak season in the green.”
As Whirlpool's Mr Das Gupta fervently prays, “Hopefully, the second fortnight of May would be better.” But he pessimistically adds, “Even as I say this, it is overcast in Delhi.”
heena.k@thehindu.co.in
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