AC demand soars amid surging mercury and a sweltering summer ahead

Its going to be a sweltering summer in India. Forecasts of heatwaves and scorching days ahead have led to skyrocketing demand for airconditioners, reported The Economic Times.

AC demand surge

As per The Economic Times report, installations are taking up to two weeks in some areas and companies are facing the prospect of stocks running out. The sales have also surged as much as three times from the year before. This rise in sales is also seen in markets where demand has traditionally been low, with temperatures at 40 degrees Celsius and above.

“No one in the industry anticipated this high sale — it’s a record year,” Daikin India managing director KJ Jawa told The Economic Times.

For instance Retail Chain Girias which has 150 stores in Karnataka, Tamil Nadu and Puducherry, used to sell 500-600 ACs a day during peak summer. This has now surged to 1,500 units a day. Similarly, Great Eastern Retail which sold about 1,200 units a day during last year’s heat wave in West Bengal and Odisha has seen an increase of 1,800 units a day through 51 stores. As per The Economic Times, Vijay Sales, which has 135 stores in Maharashtra, Gujarat, Delhi-NCR and Andhra Pradesh, is now selling almost 4,000 units a day compared with about 2,500 last year.

The Economic Times report also noted that due to the surge in demand, the deliveries and installations have been delayed for 10-12 days. This, due to the lack of infrastructure to tackle such a sudden spike in demand. The brands are also unable to replenish stock that fast.

Industry Stock

Meanwhile, this unprecedented demand for Air Conditioners has now lead to fears of shortage with most companies not having enough key components such as compressors in stock to keep pace with demand.

“The industry as a whole is struggling with a shortage of on-field installation teams in markets like the south where there is an unprecedented demand increase,” Daikin’s Jawa told The Economic Times. “Supplies too could become stressed now as we don’t have so many components in stock to expand production as per the current demand.”

Tata-owned Voltas managing director Pradeep Bakshi told The Economic Times that both AC and air cooler sales have grown at an unprecedented pace in the past month due to heat waves in multiple states.

“Companies are grappling with supply chains. As soon as stock is reaching stores, it evaporates,” he said.

The report further quoted retailers and said that sales in north India, which has traditionally been the largest AC and cooler market, have also started to rise since last week as summer takes hold and are expected to gain pace in the next two weeks with product availability likely to get scarce. Companies have also been moving their stock for the north to the south and east to meet immediate demand.

As per Girias director Nitesh Giria, some companies are also sending installation teams from other areas to places such as Coimbatore, Bengaluru and Hubli where installation time has swelled to 7-10 days.

The Economic Times quoted TN leading electronics retailer Viveks CEO Shankar BK and said that the greatest surge in sales is in smaller towns where temperatures are harsher and brands don’t have a large network of installers as sales used to be traditionally low in these areas.

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