Demand for ACs cools off due to price hike: Assocham study

Notwithstanding the scorching heat, demand for residential and commercial air-conditioners has cooled off by 10 per cent and 20 per cent respectively during the January to April period, claims an Assocham study.
The demand has been sluggish primarily as most companies have hiked prices by up to 20 per cent, it said.
The study estimates the current domestic market size of the AC industry to be around Rs 7,500 to 8,000 crore. At present, split ACs dominate the AC industry with over 69 per cent of the 4.5 million units sold last year.
The prices of ACs have risen due to 'star rating regime', even as the market saw a de-growth of 15 per cent in volume between January and April 2014 as compared to the same period last year, the study found.

Most companies attribute the rise in AC prices to the hike in input costs because of consumers focusing on energy efficient products that have valued proposition and also have a differentiated features, it said.
The price hike has also hit sales in rural and semi-urban market, which account for about 35 per cent of total sales, the study found.