CHENNAI: With summer setting in early, consumer durables expect 20 to 25 per cent growth in sales this summer, which could be higher than pre-Covid levels.
For air conditioners, air coolers and refrigerators, summer accounts for a large majority of yearly sales. As the summer has set in parts of the country in February itself, consumer durable companies expect sales to be better this year.
“We expect 20 to 25 per cent growth in sales this time compared to last year. While summer has started early, it has to be seen how long the season continues,” said B Thiagarajan, joint managing director of Bluestar.
According to Kamal Nandi, business head and executive vice president, of Godrej Appliances, February and March sales have been significantly better. “Last year, February was almost a wash-out. So, this time most of the industry players have seen around 100 per cent growth, March till now too has been almost 40 per cent growth. For the entire season, the industry expects around 25 per cent growth,” he said.
Apart from early summer, discretionary spending could get a boost due to the tax relief announced in the Budget, he added. Thiagarajan finds that Indian consumers are currently optimistic. The fears of recession seem to have subsided and hence consumers would not shy away from spending.
Further, the penetration of air conditioners still is relatively low in India and the tier II-plus cities, and higher availability of consumer finance and an affordable range of air conditioners are driving growth.
Despite commodity prices cooling off, consumer durable manufacturers are not likely to bring down the prices nor are they likely to hike them. “From the 2020 levels, commodity prices had gone up more than 30 per cent. Though they have shed almost half of the gains, prices are still higher than 2020 levels. Hence, the likelihood of price correction this season is slim,” said Nandi.
Further, the dollar movement will also affect the input costs as a large set of components are still being imported. “The Production Linked Incentive scheme for air conditioners has boosted domestic manufacturing. But, it has not attained the scale to bring down the input costs. It will take time,” he added.
