Indian demand for air-conditioning heats climate fears

Air conditioner

Air conditioners are in high demand as temperatures rise across the country. Due to the Covid-19 pandemic, buoyant summer, industry players such as Hitachi, Voltas and Panasonic expect a 20% to 30% y-o-y increase in demand this summer season.The air conditioner market in India is expected to reach 9 million units by 2022, implying a robust CAGR of 15%.

Deaths. The melting of asphalt. Power outages. These are the effects of summer heatwaves in India that have been more intense, pushing temperatures to 40 degrees Celsius.

The demand for cooling methods is increasing as temperatures rise. According to the International Energy Agency, India will account for about a third of all air conditioner sales over the next decade. It is crucial to ensure cooling access for more than 1bn people who are exposed to the extreme heat of South Asia.

Global warming could be accelerated by more greenhouse-gas-emitting and electricity-guzzling air conditioners. Authorities and researchers are working urgently with consumers and companies to ensure India’s cooling needs are met using more efficient methods. These could include making refrigerant gases more environmentally friendly or finding cheaper technologies.

Prima Madan, an environmental consultant with Natural Resources Defense Council, says that climate change is causing more intense heatwaves and longer days. Air conditioning is needed. What is most important is that increased demand for air conditioning will contribute to climate change and increase pollution. It could also have adverse effects on public health if inefficient technologies are used.

The price of fuel and imports has risen by 6-8% in the past year. However, the industry’s sentiment has not been affected. According to Gaurav Sah (Business Head, Air Conditioners Group at Panasonic India), Panasonic India’s March value has experienced a record-breaking growth of almost 25% compared to March 2021. He said, “This year we expect robust sales from all areas. This summer, we expect to see an average 30% increase in AC sales compared to last year.

According to manufacturers, supply constraints remain a problem.

Consumer durable firms anticipate record demand for cooling products like refrigerators and air conditioners in this year’s scorching heat. However, rising raw material costs and another round of price increases mean that there will be a lot more price hikes.

Major manufacturers expect to see a rise in demand due to the recent market disruptions and the rising demand for air conditioners within tier 2 or tier 3 cities. This will help them reach a growth rate of up to 35% over last year.

The industry is experiencing increased demand which puts more pressure on its common resources. The supply chain is under pressure globally. The rising costs of raw materials and transportation are adding to the problem. These factors are continually being addressed by brands to ensure that they offer the best solution possible to consumers.

Panasonic already raised the prices for its Air Conditioners by 6-8% in January 2022. They are now “evaluating the input costs changes before we make any further price increases”. LG Electronics is monitoring the situation closely as the rise in raw material costs is unprecedented.

Saurabh Baishakhia (President, Appliances, Usha International) stated that the company is seeing a steady rise in cooling appliance demand as summers are starting earlier than anticipated and many parts of India are experiencing extremely high temperatures. He said, however, that the cooler industry has been under severe pressure because of an increase in commodity prices across the board. Prices have risen by 5-8% since last year.


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