Traditionally, air-conditioners have been considered to be “luxury” appliances,

and therefore, the demand for air-conditioners have either come from the
institutional segment or from affluent homes in the top metropolitan cities of India.
That’s no longer the case. While easy finance options have made air-
conditioners more affordable, companies are also going that extra mile to make
air-conditioners a “must-have” appliance in more and more middle class India
homes.

Market Size
The Indian AC market size is around Rs 30,000 million and growing at 25%
CAGR comprising the household and commercial segments. The market is
currently at a nascent stage and shows tremendous promise to grow. However,
despite the reasonable growth in the last few years, the growth potential has not
been entirely captured

Major Players
• Amtrex Hitachi
• Blue Star
• Carrier Aircon
• Daikan Shriram
• LG
• Samsung
• Voltas
• Whirlpool
• O’General
• Matsushita
• ONIDA
.

Growth of residential segment driven by higher affordability and disposable

income, changing lifestyle in perceiving AC as need rather than luxury

Residential segment expected to drive growth of RAC & eventually will increase
share >80% as in the most markets. TREMENDOUS POTENTIAL FOR
HOUSEHOLD AIR CONDITIONER MARKET TO GROW

There is a huge difference in retail prices of Indian and Chinese AC’s

Today China is the largest manufacturer & exporter in the world with a CAGR of
46% in last 15 years.

Main growth driver is decreasing prices and changing lifestyles .

Domestic AC market market in 2007

Size of domestic market Rs 6280 crore and 4.3 million units with further growth
possible

• Increased standard of living for consumer

• AC became a need and productivity enhancer

Growth in exports earned foreign exchange for country

• Scale in domestic market drove competitiveness in exports (e.g., Chinese

exports of 5.9 million units driven of domestic volume of 14 million units)

• Household AC exports went upto Rs 700 crore

According to the latest annual report of Blue Star Ltd, the market size is Rs 5,600
crore. The amount is split equally between the centralised variety, and the
window/split air-conditioners

The number of household air conditioners is abysmally low in India with market
penetration of around 1% compared to 20% in Indonesia, 24% in China, 40% in
Thailand, and 45% in Malaysia

Voltas India Ltd. became the first player in the air-conditioner market to offer
consumers an air-conditioner in the Rs 10,000 (approx. U.S. $220) price range.
Keen on roping in the first-time air-conditioner buyer, Voltas has launched two
models—a 0.6-ton air-conditioner priced at Rs 9,990 (approx. $218) and a 0.8-
ton model at Rs 11,000 (approx. $242). For a 0.8-ton air-conditioner with a
remote control, a buyer would have to shell out an additional Rs 1,000 (approx.
$22).

Market Players

Hitachi Air Conditioners

Hitachi has the best efficient air conditioners in the market. BEE rates most of
their products 4 stars and 5 stars.

Regarding innovation Hitachi launched the first Side Throw AC , the first Hi Wall
Mounted Split AC and the first Ceiling Mounted Split AC. Most of Hitachi ACs
are having highest Energy Efficiency Ratio (EER) in its category

The sound level is much more lower (34dB) in Hitachi air conditioners, far lower
than other manufacturers.

Daikin
For a company that has sold its air-conditioners on the promise of silence, Daikin
is planning to get noisy. It wants to be among the leading air-conditioner brands
in India by 2013 and is set to sell products at lower price points to a different set
of consumers.

Carrier air conditioners

Why choose Carrier Air conditioners?

Founded in 1915, carrier is the inventor of modern air-conditioning and has

developed itself into being the world’s largest provider of air-conditioning, heating
and commercial refrigeration systems (HVACR)

Carrier is also one of the first to adopt the energy efficiency label issued by the
Bureau of Energy Efficiency (BEE)

Awarded the First prize for energy conservation in Consumer Goods Sector in
2007 & 2008 by the Ministry of Power, Govt. of India

Like Hitachi most of Carrier ACs are having highest Energy Efficiency Ratio
(EER) in its category

Panasonic / LG / Voltas air conditioners

Panasonic has launched many new models recently. Being a Japanese company
the products are of very high Quality.

LG has been in Indian market for quiet a long time and has good market share in
Indian air conditioning market.

Voltas a Tata product is a known name in India, but they do not have much high
stars rated AC’s as compared to carrier and Hitachi

Samsung / Electrolux / Whirlpool air conditioners

These are consumer electronics companies and do not have a focus on a single
product. They offer entire range of home electronics. The products are generally
sourced from other OEM’s, and they do not have an edge as compared to carrier
and Hitachi

Challenges

To connect more effectively with the consumer and also to change cost structure.
Changing perspective that Air Conditioner is not an luxury item any longer

Future trends

In consonance with the global trend, over the years, demand for consumer
durables has increased with rising income levels, double-income families,
changing lifestyles, availability of credit, increasing consumer awareness and
introduction of new models.

Products like air conditioners are no longer perceived as luxury products in India.