Panasonic says it expects 35% growth in the AC segment over pre-pandemic levels

In sync with the record sales of home air conditioners due to the early onset of summers and soaring temperature, Panasonic India is expecting an overall 30-35 per cent growth of air conditioners this summer season in comparison to the financial year 2019.

Manish Sharma, CEO, Panasonic India & SA told Business Today, “We have been seeing a record demand for air conditioners. This April, we recorded growth of over 80 per cent over last April (2021) and over 60 per cent growth over April 2019. Even March had been fantastic where we recorded a growth of nearly 142 per cent versus March 2019.”

Attributing this phenomenal growth to the pent-up demand and early onset of the summer season, Sharma added “We are hoping to see an overall 30-35% growth this summer (versus FY2019) for Air Conditioners.”

The company is witnessing a huge demand for Inverter ACs, where Panasonic's market share stands at close to 6 per cent in the calendar year 2021 (as compared to just 4.2 per cent in the calendar year 2020). This year, Panasonic is witnessing and expecting sales from all regions, primarily due to the pent-up demand from the last year.

Catering to the growing demand, other than the established players, new players have also entered the Indian market. In March this year, Thomson had ventured into the air conditioner segment aiming to capture a 10 per cent market share by 2025. And now Motorola has launched Convertible ACs at the starting price of Rs 31,499.

According to Consumer Electronics and Appliances Manufacturers Association (CEAMA), the industry had sold 17.5 lakh units in the month of April alone, an all-time high for the month. CEAMA also indicated that AC manufacturers could clock a record sale of 90 lakh units this year.

However, the robust demand and euphoria can be short-lived. Industry experts indicate that there is likely to be a shortage of stocks due to supply chain constraints. The key components, including compressors and chipsets, are all imported from the neighbouring nation. And containers stuck at major ports, such as in Shanghai, is not helping manufacturers either.

“The supply chain challenges continue to remain. The lockdown in some key cities in China has impacted some manufacturing locations. As a result, ships are blank sailing (or skipping) some of the ports which has resulted in a container backlog. The positive side is that the shipment prices are stabilizing now," Panasonic's Sharma said.

The shortage of components and supply constraints could result in yet another price hike, a part of which will be passed on to the consumer. The industry has already witnessed a hike of around 7 to 10 per cent since January this year and there could be another round of price hike of around 6 per cent by the end of next month.

“While there is continued pressure on input costs, we are working to minimize the impact on consumer pricing. The last price increase was in January 2022 by about 6-8 per cent,” added Sharma.