AC makers mull price hike to offset rupee slide impact

The sweltering summer could just get worse for consumers, with air conditioner manufacturers mulling price hike to offset impact of sharp depreciation of rupee in the last one month.

While Blue Star said it will increase price of its room air conditioners effective from July 1, others such as LG India and Voltas are monitoring the situation keeping options open for such a similar step.

     
"Even though room air conditioner sales are good this year, rupee slide has forced us to revise prices. We do not have enough margins to absorb rupee devaluation," Blue Star Executive Director & President (Air-Conditioning and Refrigeration Products Group) B Thiagarajan told PTI.

Blue Star will increase prices by 2.5 to 7.5% depending on the model, he added.

     
At present the company's split ACs are priced at a range of Rs 30,900 to Rs 42,100, while the window ACs are available for Rs 24,500 to Rs 34,500.

Another major player in the segment, LG India is also keeping a close watch on the rupee movement before taking a decision."We are monitoring the situation. If the rupee situation remains the same or further depreciates it will definitely have an impact on pricing," LG India Business Head Saurabh Baisakhia said.

     
Similarly, Voltas is also keeping its option open."There will will not be an immediate increase in prices of our products but if the rupee depreciation continues, surely we would have to increase prices," Voltas Ltd Chief Operating officer Pradeep Bakshi said.

     
Rupee has been on a continuous slide against the dollar and slumped to record low of 58.98 last week.

Air-conditioner companies use lot of imported components in manufacturing air conditioners, hence any slide in rupee has a direct impact on the companies' margin.

Despite the challenges due to the rupee depreciation, air conditioner manufacturers have been enjoying a good summer this year with sales by jumping 25-30%.