India's heatwave to lift AC sales to record, but supplies from China delayed

Whirlpool of India

17/05/2022 11:59

By Krishna N. Das
    NEW DELHI, May 17 (Reuters) - Indian air conditioner
manufacturers are expecting record sales this year as a heatwave
scorches most of the country, an industry body told Reuters, but
delayed arrivals of components from COVID-hit China may cause
shortages of premium products.
    With temperatures this month breaching 49 degrees Celsius in
New Delhi, sales are set to reach 8.5-9 million units this year,
up from 2019's previous record of 6.5 million, the head of the
Consumer Electronics and Appliances Manufacturers Association
(CEAMA) said.
    "The market has been extremely good because this year, we
got the heat in the second half of March rather than April,"
CEAMA President Eric Braganza, formerly the India head of
China's Haier Appliances, said on Tuesday.
    Power demand has also hit a record high as India registered
its hottest March in more than a century and an unusually hot
April.
    "Because of the (COVID-19-related) issues in China, it is
taking longer for supplies to reach," Braganza said. "As a
result, and with a surge in demand, we've seen that
energy-efficient conditioners are what are in short supply."
    Braganza, whose association members include Voltas Ltd
 VOLT.NS , Whirlpool of India Ltd  WHIR.NS  and Havells India
Ltd  HVEL.NS , said deliveries of parts from China are now
taking 60-90 days, up from 45 days normally.
    Indian companies depend on China for 10% to 20% of AC
components like compressors and controllers. Energy-efficient AC
sales would mostly be affected because other products largely
use locally made components, Braganza said. 
    Blue Star Ltd  BLUS.NS , one of India's best-known AC
sellers, told a conference call this month that it had doubled
the inventory for some items like semiconductors to 90 days due
to a "mad rush to block the quantities from the vendors".
    Voltas, a unit of India's Tata conglomerate, said it was
reliant on imports for only a few components as it has been
trying to increase localisation over the years.
    But it added that given the surge in demand in March and
April, some products could be in short supply.
    Braganza said that later in the year, the dollar's
appreciation and a rise in raw materials costs also meant
manufacturers may be forced to increase prices. 
    The Indian rupee  INR=IN  hit a record low of 77.7975 on
Tuesday.  urn:newsml:reuters.com:*:nL3N2X91JB
    "We will have to really cross our fingers and wait and watch
what happens from July to December," Braganza said.

 (Reporting by Krishna N. Das)
 ((Krishna.Das@tr.com; https://twitter.com/krishnadas56 ;))