AC Market In For A Major Face-lift

New Delhi, January 28: | Updated: Jan 29 2003, 05:30am hrs
The air conditioner market, which is currently in its infantile stage, is set to explode with geometric growth until 2007. While the growth of the room air conditioner (RAC) segment grew 24 per cent in 2002-03, the compounded annual growth rate (CAGR) of the segment between 2003 and 2008 is expected to be about 35 per cent.

Speaking to FE, Refrigerator and Airconditioner Manufacturers Association vice president Naishath Parekh said: "The household sector catering to requirements of homes, small offices, and establishments will be the main driver for growth in the RAC market. The household segment is expected to grow faster on strong fundamentals of economy compares to the period 1992-97 when drastic tax cuts resulted in substantial price drops."

While Mr Parekh emphasised the need for the government and industry to cooperate to develop the domestic market as in China, he said it was imperative that excise and customs duties be streamlined and that there be a complete replacement of the current state taxes by a single value added tax (VAT) later this year.

Mr Parekh, who is also deputy chairman of the Confederation of Indian Industry (CII) western region, indicated that his forecast of 35 per cent CAGR until 2008 was still only a very conservative view. "Household airconditioners are no more a luxury product and are capable of pushing the industry to perform at a CAGR of 70 per cent."