This year is being predicted to be one of the hottest in the past eight years. This seems to be the music to the ears of air-conditioner makers such as Johnson Controls-Hitachi Air Conditioning, which is expecting 20% growth in sales this summer on the back of “the pent-up demand created due to the lingering effect of the pandemic”. The brand will also invest Rs 150 crore over the next two years in brand building and capacity expansion.
The growing demand of ACs from SEC B&C category towns will also help, says Gurmeet Singh, chairman and managing director of Johnson Controls-Hitachi Air Conditioning India. “Many aspiring consumers and first-time buyers are from these cities,” he adds. As per a recent World Bank Report, India is likely to see demand for a new air conditioner every 15 seconds by 2037.
Hitachi Cooling and Heating India’s turnover stood at Rs 2,159 crore for the year 2022. “India is playing a strategically important role for Hitachi Cooling and Heating. We are working towards developing it as a hub to service not only the Indian market but also other countries,” says Singh.
The changing weather patterns with longer summer seasons and uncomfortable monsoon seasons is also another factor driving sales of ACs, say industry insiders. This will push the demand up for ACs across the country in the coming years.
Another dynamic that is ramping up sales is that cities where ACs were not required until about two years ago are also experiencing unprecedented heat and therefore growing AC sales. This is opening up the market for new categories- all-season ACs and ACs delivering optimal indoor experience even in extremely high temperatures like 45 to 52 degrees are in good demand.
The commercial AC segment is also showing steady growth, especially with demand increasing for ACs for small commercial spaces. This has opened up a whole new category for the brands.
Alongside, Hitachi is also working to increase its retail footprint. The company plans to add another 16 exclusive brand stores in India to its current 94. “The retail footprint expansion is part of the brand’s aggressive growth strategy aimed at achieving more than 10% market share and 20% sales growth in the air conditioner market,” he adds.
“We already have great product portfolio of 80+ SKUs and are adding more intelligent SKUs,” he says.
The size of Indian HVAC (heating, ventilation and AC) market is estimated to be $7,820.5 million as of 2021. It is expected to grow to $29,282.7 million by 2030. (source: psmarketresearch.com)
Hitachi is present in both window and split AC categories. Its split AC versus window AC business stands at 80:20%. Residential versus commercial division sales stands at approximately 70:30%.