Voltas, the leading room AC manufacturer in the country, may resort to a price hike in March, just at the commencement of new season for air conditioners. Other players too may follow the leader and hike the prices as the costs have already increased for them. Presently, however, room AC manufacturers are saddled with higher inventory in the system and also are facing weakness in demand in the Room AC segment. Room AC manufacturers are hoping that by March Rupee will strengthen further which would bring down the cost of raw material for the industry.
Voltas currently imports indoor units and compressors whereas outdoor units for North Indian market are assembled in the company’s Pantnagar facilities. For the rest of the country they are outsourced to domestic third-party manufacturing ﬁrms. Rupee depreciation in first half of current financial year had affected the company’s manufacturing cost adversely like any other AC manufacturer who imports main components from abroad. With the rise in import duty, Voltas is planning to manufacture some of its own molds and de-risk the business from Chinese imports.
For room AC manufacturers in general and for Voltas in particular, first half of the current financial year was forgettable one as their sales growth was muted which in turn was due to an erratic summer.