New Delhi: Prices of room air conditioners have started moving up before the peak summer season. Dealers say several major brands have already raised prices as companies prepare for higher demand and rising production costs.
Dealers told NDTV Profit that LG Electronics and Hitachi increased air conditioner prices by about 5 to 7 per cent in March. Other brands such as Blue Star and Voltas are also expected to increase prices within the next few days.
According to dealers, the price changes could happen within the next three to ten days as companies adjust their pricing strategies before the summer rush.
Dealers report early price hikes
Retailers say the price increase has already reached the market for some brands. They expect other companies to make similar moves soon.
The increase comes at a time when manufacturers want to pass on higher input costs to customers. Companies also want to position their products ahead of what is expected to be strong seasonal demand.
Dealers said distributors have already started increasing their stock in the March quarter. They expect higher sales during the coming months and want to prepare for further price increases.
Rising input costs push manufacturers
Several factors have pushed companies to increase air conditioner prices. One major reason is the rise in copper prices. Copper is widely used in air conditioner compressors and coils, so higher prices directly raise manufacturing costs.
Manufacturers also face pressure from the weakening rupee. Many air conditioner components come from overseas suppliers. A weaker currency raises the cost of these imports.
Dealers also point to supply chain concerns linked to geopolitical tensions in the Middle East. Such tensions could affect shipping routes and the supply of key components.
New energy efficiency standards have also increased costs. Companies must upgrade their products to meet stricter rules before selling them in the market.
Hotter summer likely to boost demand
The price increases come at a time when weather forecasts suggest strong demand for cooling appliances. The India Meteorological Department has warned that temperatures may remain above normal between March and May.
Higher temperatures often lead to a sharp rise in air conditioner sales across many parts of the country.
Industry executives have earlier said companies may need to revise prices if raw material costs continue to rise.
Earlier price cuts after GST reduction
Air conditioner prices had fallen last year after the government reduced the goods and services tax on ACs. The tax rate dropped to 18 per cent from 28 per cent in September.
The tax reduction helped lower retail prices and gave some relief to buyers.
However, the latest rise in commodity prices and strong demand expectations have pushed companies to increase prices again ahead of the summer season.