Ahead of the peak summer season, air conditioner prices are about to move up. Major AC brands have already hiked prices by around 5-7 per cent in March, while other brands are also expected to follow with price hikes over the next three to ten days, according to a report by NDTV Profit.
The increase in price comes as manufacturers attempt to pass on rising input costs and prepare for what is expected to be a strong demand season. The report added that channel checks with dealers indicate that stocking has already picked up in the March quarter, with distributors building inventory in anticipation of both higher demand and further price increases.
What is causing this hike
Multiple factors are pushing AC manufacturers to increase prices. Rising copper prices, a key raw material used in compressors and coils, have increased manufacturing costs. At the same time, the weakening of the rupee has raised the cost of imported components, many of which are sourced from overseas.
Dealers, in the report, point to the global supply chain uncertainties, particularly amid ongoing tensions in the Middle East, which could disrupt shipping routes and component availability.
Additionally, new energy efficiency norms are adding to the production costs as companies upgrade products to comply with stricter standards.
Demand Expectations
The India Meteorological Department (IMD) has warned of above-normal temperatures between March and May. The timing of the price hikes also coincides with forecasts of a hotter-than-usual summer.
Industry executives have reportedly indicated that companies may need to take pricing action.
In an interaction with NDTV Profit, the MD of Blue Star, B Thiagarajan, said that AC prices could rise by 10 to 15 per cent due to commodity inflation and regulatory changes.
AC prices softened last year. In September, companies had cut prices following the GST reduction on air conditioners to 18 per cent from 28 per cent, which had provided some relief to consumers.
