India's AC market poised for exponential growth: Blue Star MD

India’s air conditioner market is set for robust growth, driven by the country’s changing climatic conditions, rising disposable incomes of India's expanding middle class, and growth in the rural economy. With temperatures regularly exceeding 40°C during summer months across various parts of the country, air conditioning is not a luxury anymore but it’s a necessity for both residential and commercial users.

According to estimates, India's AC industry is projected to double by FY30. This growth will be fueled by the increasing demand in Tier 3, 4, and 5 markets, as well as by replacement buyers and those purchasing ACs for additional rooms in their homes.

“With India set to add approximately 450 million middle-class consumers by 2030, the market for room ACs is at its inflection point and is poised to grow exponentially over the next few years,” B Thiagarajan, Managing Director, Blue Star, told reporters at a press conference held in Delhi today.

He said that positive trends, such as the expansion of the housing sector, increased adoption of renewable energy, and growth in the rural economy, are also expected to shape the industry's future.

“This represents a significant opportunity for us, backed by over 80 years of air conditioning expertise and a strong market foothold. We continue to make significant investments in R&D, manufacturing as well as supply chain to enhance competencies and capabilities to effectively leverage the growing demand,” Thiagarajan said.

Price hike on cards

On pricing, Blue Star MD B said that the company is likely to hike prices of home ACs by 4-5% in April. This was attributed to volatility in metal prices and rise in import costs due to a weaker rupee.

On production capacity, he said that Blue Star's production capacity is currently around 1.4 million room ACs, with plans for gradual expansion to 1.8 million units in the near future.

Blue Star, through its fully owned subsidiary Blue Star Climatech Limited, has established a manufacturing facility in Sri City, Andhra Pradesh, which began commercial production in January 2023. Additionally, the company operates two dedicated plants in Himachal Pradesh for manufacturing room air conditioners, he said.

Blue Star MD said that the company is making strong strides in e-commerce and modern trade channels, investing in in-store demonstrators to drive sales and using targeted online and offline promotions to boost off-take across all market segments. The company is also expanding its distribution network, particularly in the north. As of now, Blue Star has a network of over 2,100 service centers and more than 150 service vehicles.

Launches 150 models of Room ACs

In a bid to meet growing demand this summer, Blue Star on Thursday unveiled its new comprehensive range of 150 models of Room ACs, including a ‘flagship premium’ range, for the upcoming summer season. The lineup features inverter, fixed speed, and window ACs, addressing the needs of every consumer segment across all price points. These models are available in various cooling capacities from 0.8 ton of refrigeration (TR) to 4 TR, with starting price of ₹28,990.

Eyeing to fortify its position in smart Wifi and heavy duty AC segments, Blue Star has launched an elaborate range of nearly 40 models of Smart Wifi ACs which have unique and smart features such as ‘Customised Sleep’, where one can preset the temperature, fan speed, cool/fan mode and switch on/off the AC every hour for 12 hours, ensuring uninterrupted sleep. It has also launched a range of flagship models, including ‘Super Energy-Efficient ACs, ‘Heavy-Duty ACs,’ ‘Hot & Cold ACs’ and ‘ACs with Anti-Virus Technology’.

“As temperatures across India continue to rise each year during the peak summer season, the Company offers its high-performance range of 'Heavy-Duty ACs.' Built with superior specifications, these ACs deliver exceptional cooling power and comfort, even in scorching heat of up to 56°C. Featuring a robust air throw of up to 55 feet, they maintain full cooling capacity even at 43°C, ensuring optimal performance in extreme conditions,” it said in a release.