Chennai: “The market size of room air conditioners (ACs) in India is 5.5 million units. But the market penetration is just around six per cent while globally the market size is around 140 million units with a penetration of 30 per cent,” said joint managing director, Blue Star Ltd, B Thiagarajan.
“With our neighbour China sporting the highest market share in the world with 80 million units and with a penetration 30 per cent, India has a tremendous potential in the AC industry in the future,” he added.
Thiagarajan said this while unveiling Blue Star’s first lineup of super-efficient inverter ACs with an ISEER rating of 5.30 and launching 75 new models to celebrate the brand’s 75th anniversary at an event in Chennai on Thursday. The range of these inverter ACs starts from Rs 33,790.
“The room AC market in India is likely to register a modest growth of four per cent in FY19 due to various reasons. We are targeting to grow by 10 per cent in the same year and increase our market share to 12.8 per cent. In FY20, we expect the AC market to grow by the same 10 per cent while we are planning a growth rate of 13.5 per cent,” the JMD said.
Regarding Tamilnadu’s contribution, he said, ‘The total market size of ACs is 55 lakh of which window ACs alone contribute nine lakh units.’
“Also, stats show that people have started accepting newer and more energy efficient ACs. From almost no change in 2016, the five-star rated models grew by 29 per cent while three star models grew by 13 per cent in 2018. In fact, till 2014, the growth of both the models were just in single digits,” he said.
Explaining the reasons for the dip in growth, he said, “Erratic weather conditions in summer and tepid festive season response led to weak secondary sales. Increase in customs duty, commodity prices and rupee appreciation led to increase in prices of ACs by eight to 10 per cent. Further, exchange rates went up along with the infamous NBFC crisis.”
“The plan to reduce the GST slab from 28 per cent to 18 per cent led to market downing out of anticipation and it took us almost six months to liquidate stocks last year although things are under control now,” he said.
Future plans for the firm include cross Rs 5,000 crore in revenues this year. The firm has also planned to invest Rs 55 crore in FY20 on advertising and branding, apart from investing Rs 80 crore in five facilities each in four cities.
The firm is on course to launch the new plant at Sri City in FY21.