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Richa Mishra

NEW DELHI, June 16

APART from bringing rains will the month of June succeed in showering the desired revenues for the air conditioner segment of the consumer electronics and durables industry?

If the trend of the first five months is anything to go by, the aircon segment has experienced a sea-saw ride.

However, if the growth trend experienced in May continues, then the segment can merrily close the first half with a growth of about 12-15 per cent, say industry analysts. They further point out: "let's not forget that 60 per cent of the annual sales for the segment comes from the first half (January- June)."

Commenting on the trend, Mr R. Zutshi, Director-Samsung India, said: "In the first five months of the year, the AC industry is estimated to have touched 3.4 lakh units, implying a growth of around one or two per cent over AC sales in the corresponding period last year. The expected growth in the segment has not happened this year primarily because of the negative fallout of the truckers strike and the not so harsh summer in the North .The Northern region contributes around 45 per cent of the total AC sales."

Concurring with these views, Whirlpool's Vice-President -- Marketing, Mr Ashok Bhasin said: "Till May this year, the industry has grown well below expectations. As growth projections of 20 per cent and more for the full year, we are seeing only a growth of around 8-10 per cent. The primary reason for this is the delayed summer, which has impacted consumer offtake."

Said, Mr Rajnish Ohri, General Manager, Marketing, Daikin Shriram Airconditioning Pvt Ltd, "While April was not great, May was a very good month for the residential market. Daikin during the first five months has experienced a growth of about 20 per cent. The industry will grow by 20-25 per cent if June remains OK."

Despite the drop in AC prices by around 10 per cent and the price differential between the organized and the unorganized AC around Rs 2,000, the industry is unanimous in its view that June will determine the performance of the segment. Commenting on the decline in prices, Mr Bhasin said: "These prices have been driven down due to combined effect of cost reduction measures taken by manufactures, reduced profits aspirations both at manufacturers and traders end and also the duty rationalisation."

"We expect the AC industry to touch a size of around 6.9 lakh units for the year, slightly below the expected market size of 7.2 lakh units. This would imply that we expect the industry to still record a growth of 6-7 per cent over last year's corresponding period," Mr Zutshi opined.

However, a look at the performance of some of the players reveals that all have experienced growth. While Samsung claims to have achieved a growth of around 74 per cent in the January-May period, Whirlpool Magicool range of air conditioners has been able to register a growth of approximately 40-50 per cent over last year.

Mr Kawaljeet Jawa, Vice-President, Voltas Ltd, Cooling Appliances Business Division, said that in May the growth company experienced a growth of about 20 per cent and more.

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