ACs will become more expensive! Prices will rise due to the shortage of raw materials and LPG
The AC industry is under pressure due to unseasonal rains and rising costs. Production may be affected by rising plastic prices and a shortage of LPG. ACs and other appliances are expected to become costlier by up to 510% from April.
Air conditioner (AC) manufacturers are treading cautiously this time. The reason is unseasonal rains caused by a western disturbance in many parts of the country, which could impact sales in the early summer.
Typically, the heat begins to rise in March, and demand for cooling products rises sharply, but this time the weather has increased companies' concerns. However, the industry is hopeful that temperatures will rise in April and demand will improve.
Double blow of inflation
Companies face challenges not only from the weather but also from rising costs. The ongoing tensions in West Asia are driving up the prices of raw materials, especially plastic.
Furthermore, limited supplies of LPG gas are also impacting production. According to industry estimates, the increased cost of plastic could also lead to a 10-12% increase in the prices of large household appliances like washing machines and refrigerators.
ACs are expected to become more expensive from April.
Companies say that prices have already risen this year due to new energy labeling regulations. Now, rising raw material and transportation costs could lead to another increase starting in April. It is estimated that AC prices could increase by 5-10% from April 1, 2026.
Production affected due to shortage of LPG
Some companies reported that LPG supplies to factories have been reduced. If this situation continues, AC production may have to be cut by 20-30%.
In fact, the government has reduced LPG supplies to the industry, prioritizing domestic gas. LPG is used in the painting and drying processes of AC manufacturing, so this directly impacts production.
Impact on customers' pockets
Rising raw material prices can lead to companies passing this burden onto consumers, forcing them to purchase more expensive products or switching to cheaper alternatives with lower efficiency.
Summer season will be important
Industry experts say that if the weather doesn't return to normal by the end of March, this year's sales could be lower than expected. While growth is expected compared to last year, the likelihood of record sales like 2024 is low.
India's AC market is approximately 13.5 million units, with several major companies competing for market share.
Overall, both weather and inflation pose significant challenges for AC companies this year, which could directly impact customers' pockets.