Boom in AC Sales Amid Sweltering Heat; Companies Shifting Stocks From South to North

Come summer there is a huge demand for ACs, but this time due to the sweltering heat in the North, the demand for ACs did not slow down even in June. Hence, companies are reportedly shifting their stocks from the South to the North.

Hyderabad: Due to the scorching heat in North India, the demand for air conditioners (AC) has increased tremendously. As a result, companies are moving AC stocks from southern states to the north. While the spare parts required for the quick manufacturing of ACs are being imported by plane from abroad to meet the demand. Hence, the transport charges are increasing.

As the prices of copper, aluminium and steel, which are vital for the manufacturing of ACs, have also increased significantly compared to the beginning of this year, the overall prices of ACs have gone up by 4-8%, according to the company managers

Generally, demand for ACs is high from January to May every year. Anticipating the demand for ACs, companies manufacture spare parts and raw materials in October and December every year ahead of summer.

Transport charges are kept under control as essentials are imported by ships. Generally, after May sales of ACs slow down. But this time, even in the third week of June, as the intensity of the heat did not decrease, there was a high demand for ACs. With the arrival of the monsoon, the first week of June saw rain in some parts of the south, but the sun is shining again. As a result, sales of ACs here, too, are higher than usual, say vendors

Although ACs are manufactured in our country, some parts like compressors, microprocessors and cross-flow fans are imported from China, Taiwan, Thailand, Malaysia and Japan. As companies are unable to anticipate a sudden surge in demand their inventories run low. As a result, prices have gone up. Transportation costs have risen sharply as spare parts are being imported from abroad by planes.

Meanwhile, company outlets, which sell ACs, receiving complaints stating service personnel, who have to install them in homes/offices, do not come even three to four days after the delivery. The companies attributed the delay in installation due to a shortage of staff.

Furthermore, Northern states are witnessing sweltering heat compared to the southern states, hence, some companies are shifting their AC stocks to the north to meet the demand.

Sales up by 70 per cent, says B Thyagarajan, MD, Bluestar

''Industry estimates that sales of ACs will increase by 25-30% in the current season over last year. Notably, the stocks of ACs in the market are in demand this time due to 70% growth. The price of copper, which is crucial for the manufacture of ACs, was 8,300 dollars per tonne last December, but now it reached 10,100 dollars.

The price of steel increased from 585 dollars to 800 dollars per tonne and the price of aluminium rose from 2,100 dollars to 2,500 dollars per tonne. In addition, as spare parts are brought from abroad, their price and transportation costs have also increased. Therefore, the prices of ACs have been increased.